Reefer Container Shortage Due to COVID-19

There are reports of a shortage of refrigerated containers in Australia, caused by reduced activity at China’s ports following COVID-19 and the extension of the CNY holidays.

There are reports of a lower availability of refrigerated containers for our exporters to use, which has been caused by reduced activity at China’s ports due to COVID-19 and the extension of the Chinese New Year holidays.  The likelihood of a global container shortage has even been suggested.

The COVID-19 virus has severely impacted some of the major Chinese ports like Shanghai, Tianjin, Ningbo and Xingang which are highly congested and, due to this, there is a massive shortage of electrical plug points to hook up to reefer containers, causing some vessels to divert to alternative ports.  

Some container lines are currently showing ‘blank sailings’ on their schedules for routes into China. Shipping companies allocate a specified number of days to complete a full sailing rotation for all the ports of call on their schedule, and a blank sailing indicates the cancellation of a vessel’s call at a certain port, or leg of a route.

This situation, together with the general business shutdown in China, also means that in a lot of the cases, containers meant for the Chinese markets are either stranded on board ships, off-loaded in alternate locations or sitting in various ports and terminals incurring port storage, demurrage and detention.

Shipping lines may give clients the option of diverting their reefers to an alternate port in China, or other countries in the region - or even returning the container back to origin at the exporter’s expense. Some of them, including MSC, Maersk, CMA GGM and Zim, are implementing congestion surcharges at Chinese ports, in the order of USD1000/- to USD1250/- per FCL, due to the ongoing terminal reefer plug shortages there.

This comes at a time when global perishable trade volumes have been reported to have grown by 7% in 2019 on the back of strong demand for fresh and frozen foods into China and more than 60,000 TEUs of frozen meat being imported into China last year. China accounts for 25% of the world’s containerised trade in beef. The full consequences of this corona virus are yet to be felt.

We recommend that shippers who have containers caught up in the crisis discuss specific covers, policies etc with their marine insurers while this issue is ongoing.

As licensed Customs Brokers and International Freight Forwarders based in Brisbane, Colless Young offers you professional advice on all international trade and shipping activities, both import and export. We handle cargo through all Australian ports and airports.