News Logistics
Disruption of global logistics continues in 2022
Thousands of container ships are currently moored off the coasts of North America, Europe and Asia. Global logistics are disrupted, causing congestion in the supply chain. These problems will continue next year, Rabobank expects.
The capacity limitation due to the cancellation of sailings since the outbreak of the corona crisis has led to a vicious circle. As a result, the worldwide distribution of containers has become unbalanced, according to a recent study by Rabobank. According to the bank, there is no easy solution to this problem. And so there will probably still be disruptions in 2022.
Successive incidents exacerbate the disruption of the container market. These include the blockade of the Suez Canal, port closures and power shortages in China. “It is critical that the capacity constraint is quickly removed. Until this is done, it will hamper supply chain efforts to reduce container backlogs, relaunch trade in raw materials and semi-finished products and meet rising demand of the retail sector," said Rabobank analyst Matteo Iagatti.
Rates keep rising
With the approaching holidays, consumer demand is increasing. “Strong global retail demand, along with imbalances in container distribution, continues to put pressure on ocean shipping,” continued colleague Xinnan Li. “While there is limited room for rate growth (last year the rates have already increased by 350% on average, ed.), we expect the market to continue to expect high rates and low reliability for the next six to XNUMX months."
According to Rabobank, the recovery of global logistics is mainly hampered by imbalances in refrigerated transport. Road transport also contributes to instability. The sector is struggling with a structural and growing labor shortage. It is therefore expected that the tariffs for road transport will also rise in the coming year.
Long-term solutions
This year, a record capacity of 3,5 million TEU (20 feet long containers) was ordered, representing 14% of the current total number of container slots. Larger ships are expected to enter service in the coming years. “But these are long-term solutions. The biggest threat of disruption in the near future comes from multiple factors: the global problem of container distribution, regional imbalances in the refrigerated transport sector and a global shortage of truck drivers and skilled labor in the food supply chain,” said Iagatti.
Concerning dry bulk, the congested ports give priority to restoring a smooth flow of containers. In this way, a slow decline in rates can be achieved slowly. This could take well into 2022. In short, the high container rates will continue for another year.
Limited room for further rate increases
With regard to refrigerated containers, the total capacity is expected to continue to grow by 4%. However, higher prices are expected once the export season in South and Central America starts. “Overall, we expect shippers to experience higher total transport costs at least until the second half of 2022. The scope for further increases in container rates is limited, but the price recovery will continue to be stormy and likely to continue. take at least half a year to possibly a year," concludes Li.
Jeanette Pennings
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