GLOBAL SUPPLY CHAIN DISRUPTIONS TO WATCH OUT FOR IN 2022
In fact, the digital supply chain experts project44 claim that after falling for months, average shipping delays from China to Europe rose beyond six days in December. There has also been a steady increase of delays since October on routes from China to the US West Coast. For months, production issues and congested ports have severely interrupted schedules.
“Delays are likely to continue well into 2022,” project44 said, “as Covid breakouts continue throughout supply chains and consumers continue to buy at a healthy rate.”
The Impact of COVID-19
Reports have stated that COVID-19 will continue to have a massive impact on global trade. As of now, shipping costs are still soaring, delays have become almost expected, and empty shipping containers throughout the world are in the wrong place. This means that the number of blank sailings has been increasing.
“Blank sailings will continue well into 2022, as ports work down backlogs and consumer spending remains strong,” said Josh Brazil, Vice President of Supply Chain Data Insights at project44.
On top of that, ships are having to wait longer than ever at ports to load and unload. According to Lloyd’s List Intelligence, at 0800 GMT on the 25th of January, there were 82 container ships waiting to take cargo on board off the ports of Shanghai and Ningbo in China. On top of that, there were another 61 ships near Yantian and Hong Kong waiting.
Unfortunately, China’s zero-Covid policy is causing further hassles along the way. So, disruption is forecast to continue into the foreseeable future, especially with the impact of the Chinese New Year.
“Most of the delays and queues in China are a result of land-based restrictions imposed by port authorities at key exporting ports,” said Michelle Wiese Bockmann.
She continued: “The zero-Covid policy has led to a roster system for port workers, with only half working at any one time and confined to the port, while the others are off.”
Port authorities are implementing these policies on the assumption that if any infections were to spread through the terminals, they would cause closures and even greater delays. However, lower handling capacity equals longer waiting times for vessels.
The price to send a container from Asia to Europe or the US has sky-rocketed and the maritime consultancy Drewry has estimated that the shipping industry made record combined profits of roughly $190B in 2021 alone. Drewry believes that this record could be broken in 2022.
The impact of these shipping delays are being felt as longer delivery times and rising prices for consumers. Still, there are ways to achieve shipping cost reductions even in this extraordinary time. freight auditing and supply chain cost solutions take Covid delays into account.
The current supply chain is complicated with its many moving parts and pieces. As stated by Tim: “…more and more companies are focusing on their intermodal strategies in new ways that work around capacity constraints in any one mode. Many companies are also considering relocation of distribution facilities as part of their intermodal strategy”.
The global shipping industry is adapting in the face of its biggest disruption since the end of World War II. The world has the capacity to get goods where they need to go. Consumers will just need to be patient as the pandemic continues.
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