813.740.1911 Sales@A-American.com

We could be in for a hard winter… 

 

What do spiking electricity bills, panic-buying of gasoline, and skyrocketing natural gas prices in Europe and Asia have in common? Here’s a hint—it affects us globally.  

 

If you guessed further import delays, you’re right. First, the COVID-induced shipping container crisis put stress on the global supply chain, and now a power crisis is getting worse across Asia and Europe. To top it off—winter is coming.  

shipping containers at railroad

The Power Crisis 

 

Many countries have become reliant on natural gas to quit “dirty” coal and use cleaner energy. In the post-pandemic economy, there isn’t enough natural gas to fuel and refill depleted stocks before winter.  

 

Countries are fighting to outbid one another for supplies as many exporters move to keep a hold of more natural gas reserves. This power crisis will only get worse as temperatures begin to drop.  

 

The power crisis in Europe and Asia spells trouble for the rest of the globe, as energy shortages force factories to shut, and governments begin to warn of far-reaching energy blackouts.  

 

Since You’re Here > How 3 Companies Cornered the Container Industry & How it Affects You 

 

 

Stoking Shipping Tensions 

 

The power crunch in Asia and Europe is having far-reaching consequences. For U.S. importers of Asian goods, it poses another crimp in the supply chain just ahead of the holiday season. For commodity shippers of dry bulk, liquefied gas, and oil tankers, the power crunch means potential higher rates.  

 

 

Global fuel shortages, delayed imports, and power shortages threaten an expensive winter for consumers across the globe.  

 

 

In Asia, importers of Liquefied Natural Gas (LNG) are paying record prices to secure supplies for the winter, with some resorting to coal as a backup. China is the world’s biggest buyer of natural gas and couldn’t fill stockpiles fast enough, even though their imports were double that of last year.  

 

To reduce pollutants and meet energy efficiency targets, several Chinese provinces are already rationing electricity, and this power crisis could cause factories to shut as the government diverts gas to light and heat households across China.  

 

If widespread power shortages continue, the global prices of steel and aluminum will skyrocket, worsening global shipping, and import crisis even more.  

containers on train

Container Shipping  

 

Power use restrictions in the Chinese provinces of Jiangsu, Zhejiang, and Guangdong are being caused by tight supply and emissions restrictions. Just ahead of the holiday season, global markets will feel the pinch of the supply shortage for items such as textiles, toys, machine parts, and more.  

 

Power outages in Guangdong in China’s southern manufacturing belt are already causing issues, and some factories are resorting to using generators to keep production running.  

 

These stoppages in Chinese factories are further delaying already slow deliveries of imports to the United States and exacerbating the extreme port congestion in Southern California.  

 

Since You’re Here > Port Congestion Crisis at New Peak  

 

 

Dry Bulk Shipping  

 

For several years before the pandemic began, there was low capital available for companies to reinvest in the production of coal, natural gas, and oil. In the first few months of the pandemic in 2020, companies were able to build a stockpile but went right through it as soon as lockdowns abated. The problem? There hasn’t been much more investment.  

 

Coal in particular faces steep restrictions in China due to access to capital and environmental reasons.  

 

In our post-lockdown world, thermal coal supply in India and China have dwindled, with India’s at a four-year low. China’s supplies are further limited by strict environmental restrictions on domestic mines, and a ban on imports from Australia. This has caused the benchmark thermal coal price to rise to $205 per ton in late September.  

 

 

Liquefied Natural Gas (LNG)  

 

In Europe and Asia, the natural gas market is historically high. Last year the LNG shipping prices spiked to $200,000 a day, but currently, tri-fuel diesel engine LNG carriers are at around $51,000 per day.  

 

LNG shipping rates could see a high jump this winter if the prices continue to increase, and if chartered ships “relet’ their ships into the market to profit from higher rates.  

 

 

As temperatures drop this winter, millions of people globally will feel the impact of rising natural gas prices.  

 

 

 

Tanker Shipping  

 

Some analysts believe that the power shortage in Asia and Europe could help jumpstart the product and crude tanker rates.  

 

Due to the extremely high natural gas prices in Asia and Europe, these continents could use up to 900,000 barrels of oil a day as a substitute for natural gas. Of course, this all depends on it being a “cold winter” and would be more focused on east of the Suez Canal where oil-based fuels have better potential to become part of the power-generation market.  

 

Refiners will need to ratchet up production, which could be a nice setup for tankers especially with improving oil consumption, shrinking crude inventory, plus an energy crisis as we go into winter.  

 

  

 

Reliable Storage Solutions 

 

It looks like we are in for a winter full of shortages.  

 

While there may be a current global shipping container shortage, we still have plenty of containers on hand at our Tampa Bay lot – especially larger 40’ and quality one-trip containers.  

 

We are thankful for the opportunity to serve the unique needs of our customers across the Eastern seaboard. We look forward to finding the right container for you. Ready to get started? Contact A American Container for a FREE quote, or call us at (813) 740-1911 to speak with our friendly customer service team.   

 

Please be aware that the container industry is on high alert for scammers! A American Container will NEVER ask for a deposit to purchase a container, we do not accept online or app payments such as Venmo, Zelle or Cashapp. We do not list our containers on Facebook Marketplace, Craigslist, or any similar site. We do not have online chat agents. Please make sure to call us at 813-740-1911 for assistance or come by and visit us at 7001 East Adamo Drive, Tampa FL! Contact Us
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