Shortages of ocean containers will continue into the second half of 2011, causing headaches for importers and exporters.
Chinese manufacturers, which control the lion’s share of the box market, will take until then to ramp their production back up to its prerecession rate. They all but shut down in 2009, when the recession scuttled ocean shipping. Production is increasing slowly, but won’t approach the prerecession rate of about 4 million containers annually until the second half of next year.
Moreover, cargo lines that stretched delivery times between the U.S., Europe and Asia to save fuel and cash still face thin profit margins and tough emissions rules. The extra days at sea tie up thousands of containers.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
It’s unlikely that steamship lines will speed up most shipments again soon, since carriers are still trying to turn the corner to profitability. Many ocean carriers are under pressure from their home nations to reduce ships’ fuel emissions, and the easiest way to do this is to move slower.
Delays are hammering firms that rely on precision import deliveries of machinery, electronic components, semifinished metals and parts plus textiles. They’ll have to beef up warehousing to guard against supply shortfalls, hiking procurement budgets and inventory carrying costs.
Hardest hit: Exporters based 100 miles or more inland from ports. Midwestern firms, notably makers of high-end machinery, will take it on the chin. Ocean carriers aren’t keen to restore costly services that routinely used railroads to ship empty containers cross-country.
Companies may need to enlist brokers to find boxes or to truck products to ports where containers are more readily available.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summerThe Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
The New AI Agents Will Tackle Your To-Do ListThe Kiplinger Letter Autonomous AI agents “see” your computer screen, then complete a task, from buying a concert ticket to organizing email. This opens up a world of possibilities.
-
AI’s Medical RevolutionThe Kiplinger Letter Medicine is a field ripe for finding both exciting and practical uses for AI. The tech is already being used by doctors and researchers.
-
The Economic Impact of the US-China Trade WarThe Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
-
AI Heads to WashingtonThe Kiplinger Letter There’s big opportunity for AI tools that analyze MRIs and other medical images. But also big challenges that clinicians and companies will have to overcome.
-
The AI Doctor Coming to Read Your Test ResultsThe Kiplinger Letter There’s big opportunity for AI tools that analyze CAT scans, MRIs and other medical images. But there are also big challenges that human clinicians and tech companies will have to overcome.
-
The New Space Age Takes OffThe Kiplinger Letter From fast broadband to SOS texting, space has never been more embedded in peoples’ lives. The future is even more exciting for rockets, satellites and emerging space tech.
-
Rising AI Demand Stokes Undersea InvestmentsThe Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
-
What DOGE is Doing NowThe Kiplinger Letter As Musk's DOGE pursues its ambitious agenda, uncertainty and legal challenges are mounting — causing frustration for Trump.
