Causes of Container Imbalance

 

Container imbalance occurs when a country has too many containers carrying raw goods to their country. In general, containers deliver goods from one country to another, and these same containers are subsequently used again to bring products back to the original country of origin. With containerization, the logistics system runs smoothly when exports complement imports. Imports are usually of low cost or of little value, but when exporting they become valuable, particularly when the goods can be re-exported to the particular country where they originated. For this reason, an import deficit is detrimental to competitiveness and trade.

As stated earlier, there is much value in China’s goods flowing back to Europe and the United States. This means that the problem of container imbalance will only get worse unless the Chinese government takes action to address the cause. Currently, China is importing coal from the United States and selling it in Malaysia at a premium price (in part because of the political relationship between the two countries). The same strategy could be applied to North America, but the problem goes beyond that.

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