When Shipping Containers Are Abandoned
Logistics providers all around the globe have become acquainted with the twenty foot chunks of steel known as shipping containers. They are the envelope of our supply chain and are stocked with everything from complex computer chips to baby diapers. Without these we cannot move large quantities of supplies and material at a rapid pace to keep up with today’s consumer.
But not always does a shipping container hit its final destination point and can be abandoned at a port or rail terminal for an array of reasons. Even with the most sophisticated logistics software it could happen that a shipping container gets lost or is abandoned. With all the technology in the world, humans still need to be part of the global supply chain and mistakes that result in the loss of a shipping container happen. We will go into what causes shipping containers to be abandoned and how to avoid it.
Brief History Of Steel Shipping Containers
It was not always that we had intermodal shipping companies transferring shipping containers from one mode of transport to the other. Prior to the 1960’s longshoremen had to haul pallets and sacks of grain when loading and unloading the means of transportation. This requires a strong labor force and could sometimes take weeks to unload a single cargo ship coming in from overseas. This meant that the labor unions had a stronghold on the ports and could demand higher wages or workers could strike. Pretty much the port owners and its customers were at the will of the laborers.
It wasn’t until 1956 that intermodal shipping containers were invented and patented by the logistics entrepreneur, Malcolm Purcell McLean. (Not to be confused with McLane Company, which is now owned by Walmart and was founded by Robert McLane in 1894. It’s quite noticeable that the names are spelled differently.) The idea of cargo being loaded into a container was simple but absolutely brilliant. After being arranged neatly in a fortified chunk of steel the goods would be able to move through multiple modes of transport known as intermodal shipping. This would mean less time spent at the dock or rail terminal in regard to loading and unloading that delivered the goods to the customer sooner. In April 1956 the shipping container named the Ideal X departed the Port of Newark en route to the Port of Houston. Ever since then steel shipping containers have been support beams that allow our global supply chain to thrive.
Not Always Do Shipping Containers Make It To The Final Destination
Just like regular residential shipments that are delivered with UPS get lost, so too can big shipping containers disappear. Many things have to go right in order for a shipping container to make it to its final destination like proper documentation and scanning through each logistics point. At the same time carriers need to see that if delays are incurred they are aware of the exact location of the container. A trusted logistics provider will make it their business to see that there are as minimal delays as possible to prevent added layover fees. Such fees become a nightmare for customers as they have to foot the bill if they want their goods delivered. It's important for receivers to get a clear understanding as to what fees they can incur along the shipping container's journey until it reaches its final destination.
What Can Cause a Shipping Container To Be Delayed
Port Delays: We have all heard the news of the cargo ships lined up at the Port of Los Angeles waiting to be unloaded. For every day, week, or month that ships are delayed from being unloaded the lag will reflect on when the customer will receive their delivery. This has been hurting the retail industry as many seasonal items are not delivered on time and have to be stored until the next season or sold as closeouts.
COVID-19 Pandemic: Of course you're probably sick of hearing the word “coronavirus” but it has had a tremendous negative impact on laborers at ports and rail terminals. According to the consulting firm McKinsey & Company, 20% to 25% of the workforce is now working remotely for 3 to 5 work days a week. This means laborers at water ports and rail yards can possibly earn more and have greater flexibility at another job. That means less workers at the terminals handling the containers to keep logistics running efficiently. Of course there is always the risk of actually having COVID-19 and being out for a week but it’s the issue of longshoremen not returning to work that has had the greatest impact on shipping containers getting delayed.
No Space To Drop Containers: Just like when you are circling the big city waiting to find a parking spot, container handlers are finding it difficult to find a parking spot for shipping containers. If they can't seem to find a spot they will stack containers one on top of the other. Now when a truck comes into the port terminal ready for a container pickup they need to wait until the forklift operator is able to do a juggling act with close to 5,000 pounds of steel (that’s just for the twenty foot containers, forty foot containers can weigh up to 10,000 pounds). It is not uncommon for a shipping container to be fortified within others of its type and it is absolutely impossible to get to, and even the most savvy forklift operator won’t be able to access. All this is the cause of major delays for customers to receive their shipments.
Stuck At Customs: When traveling internationally it’s always a good idea not to pack anything that could be subject for inspection at customs. Each country has their own set of rules and chances are you might have just missed what can trigger a customs inspection. With heightened security and an economic crisis unfolding, custom agents are inspecting shipping containers at a much higher rate. Once put aside for inspection it can take time until agents actually get around to checking what's inside the container to allow its release back into transit. That can take days, weeks, and sometimes months and will delay when a shipping container gets to its final destination.
Causes For Shipping Containers To Be Abandoned
When a customer requests an order for a product or material from overseas in most cases a deposit needs to be paid to the manufacturer to trigger production. Low risk customers and big box retailers will often pay on terms while high risk customers will require a deposit and sometimes be obligated to pay in full if they want their container shipped. Similar to the way banks conduct business post the 2009 housing market crash, no lender will take on a high risk loan unless they are protected from all ends. Manufacturers will treat its customers no different and make sure that they will get paid prior to releasing a shipping container.
Once the container is in transit and there is a breakdown in the financial aspect of the transaction the breakdown can cause the container to be abandoned at the next logistical point. With no one to finance its delivery for whatever reason the container gets left at a random point along the journey. If that happens it becomes difficult to find the cargo and no logistics company likes to pick up a container in the middle of the journey. The same could apply if the freight company has to file for bankruptcy and can no longer finish the shipment. Each of these scenarios will make it quite a challenge for the customer to recoup their losses.
Empty shipping containers that are abandoned can happen due to poor recirculation of freight companies. When a container is emptied, shipping companies try to make sure that they are sending goods or supplies back to Asia. This way they can get the container back to where it can be filled while completing another shipping transaction. Sometimes it is just too costly to send them back empty and therefore they are abandoned at ports, terminals, or warehouse parking lots. Sometimes you pass a warehouse facility and see an empty shipping container just sitting around the parking lot. Businesses can use them for extra storage in order to allow new inventory to come into the warehouse. After a while weeds begin growing around them and they sit around continuing to collect dust and rust.
With a trusted freight forwarding company it is not common for a shipping container to be abandoned. But it could occur if there is a problem in regard to the financial agreement between the shipper and receiver. Everyone tries to protect themselves and sometimes there is a breakdown in communication and the container is left until it could be located and put back in route. Hopefully this never happens to you as your logistics provider is committed to see that your goods get to its final location whatever that takes.