As 2022 unravels and with the Covid variant Omicron spreading, experts say that global supply chain disruptions could remain high until the second half of the year. In an attempt to ease up this situation, Chinese ports are speeding up their cargo turnover. However, European and US ports continue to experience strong congestion as of January 2022 – according to Alan Murphy, CEO at Sea Intelligence, European ports in particular are grappling with record levels of congestion, which have been increasing since last October, with few positive indications in sight.
Worldwide, port congestion and disruption across the supply chain have made the sector spiral into what experts call a ‘container crisis’. This is understood as a combination of the scarcity of transport space available to ship products and the exorbitant increases in maritime transport costs, which entails significant effects on merchants and ultimately, consumers. As of January 2022, 11% of the global containership capacity has been on hold due to interminable queues throughout 2021; in normal years it would have been only around 2%, and there is little to no signs of improvement or levelling out. Furthermore, in one year, the price to ship a container has more than quadrupled: According to the World Container Index (WCI), which tracks freight container shipping costs, as of October 14th, 2021, such cost reached $9,900.25 per 40-foot container, which is 283% higher than a year ago.
In an attempt to ease up congestion and meet delivery deadlines, shippers and cargo owners are looking at reducing port calls in some of the busiest trade routes across the globe. A significant case is the latest decision of the 2M shipping alliance –Maersk & MSC– to temporarily consolidate Asia-North Europe routes in the new year, which means reducing the number of port calls in Northern Europe and making Rotterdam in the Netherlands and Felixstowe in the UK the main hubs of this subregion. It is worth mentioning that this decision has been broadly welcomed by stakeholders.
Despite this and similar actions, neither containership capacity and freight rates are unlikely to return to pre-pandemic levels. Moreover, trade routes are likely to continue evolving as the industry struggles for resilience across the supply chain.
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