The Chief Executive of Associated British Ports, has warned that supply chain disruption could persist until 2023.
Most goods are moved around the world by container ship. Any delays at large ports has a huge impact on cost. In 2021, there was a huge increase in shipping costs due to supply chain disruption. This has started to flow through to the cost of consumer goods and the price people pay in their local shops. There are signs that some supply bottlenecks are beginning to clear.
The Omicron Covid variant could lead to disruption in 2022. Capacity at the Ningbo container port in China could be reduced in the coming weeks after a nearby Covid outbreak. A closure of the port or reduction in capacity would have a huge impact on global supply chains, especially with Chinese New Year on the horizon. A single covid case at the Ningbo port in August 2021 led to its partial closure.
Container ports in North America are still suffering from huge delays. Last month road and rail movements at Vancouver port were stopped due to severe flooding in the region. On the US west coast, ships are waiting up to four weeks to unload cargo due to a labour shortage at key ports.
Most 20ft containers exported out of Los Angeles port are leaving the US empty in order to get the containers back to Asia as soon as possible. This will cause imbalances throughout worldwide supply chains impacting “just-in-time” systems.
At Felixstowe port there are still delays to containers being moved from the dockside to inland destinations, due to the shortage of HGV drivers in the UK, which is likely to still be an issue in 2022. In October 2021, a backlog of shipping containers forced container ships to divert from Felixstowe to neighbouring European ports to offload their cargo.
Companies may now be forced to alter their supply chains in 2022 and beyond to move from a “just-in-time” system to one which has spare capacity, increasing stock held to guard against future disruptions.
If you are looking to reduce freight costs and risk in your supply chain, contact us at Tudor International Freight, on 0333 1234 747 or email email@example.com.
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