Will there be congestion at Christmas?
According to the Global Shippers Forum (GSF), the wave of congestion sweeping the global supply chain has delayed the delivery of seasonal goods and necessities, leaving many shippers stranded between meeting impossible delivery deadlines while paying record freight charges. , This situation will not subside anytime soon.
Congestion is not just Christmas
“As we predicted, this proved to be a ‘unique peak season’,” said GSF, the spokesperson for cargo owners in international trade.
In the high-level maritime dialogue hosted by FIATA last week, GSF Director James Hookham highlighted the challenges that importers and exporters face when they put their goods on shelves and warehouses during the winter holidays.
Hookham said that importers and exporters are struggling to cope with the historical low service levels of shipping companies, ports and terminals, and inland logistics providers, but they still have to pay the highest freight and surcharges in decades.
Crowding wave sweeps inland
He explained: “This peak season, global shippers are experiencing a wave of congestion starting from the exporting country. They are now arriving at the importer’s coast and are sweeping inland. First, our ports in China are blocked, and then we are in order. The inexplicable shortage of empty containers, and then the ship suddenly full, the space is like gold powder (and the price is also high). Now our goods are lining up to enter the port, waiting for the crane to unload the boxes, and then waiting for the driver to transport them inland to our needs Place. This is a difficult journey, it is not over yet, but most of us are still holding on.”
According to GSF, the most vulnerable companies are importers and distributors struggling to meet the delivery deadlines set by retail customers because they cannot predict when the goods they have paid so much for shipping will actually arrive.
Over budget + delivery delay + fine
GSF added that they not only exceeded the logistics budget this year, but also faced severe fines due to delayed delivery and possible loss of future contracts.
However, since most deliveries are expected to arrive in the next few weeks, it is speculated that Thanksgiving and Christmas this year may be safe, but there are still major issues. “Will this congestion last until next year? Will the tight market conditions last until 2022” GSF asked. “Or consumer demand will slow down, capacity and flexibility will increase service levels, and prices will become more predictable?”
“Almost every shipping company is predicting the latter,” James Hookham pointed out. “Why didn’t they do it when they collectively expected a profit of more than $150 billion this year? But there are good reasons to question the hype of continued congestion.”
“Most developed countries’ expectations for consumer inflation levels are strengthening, and most central banks expect to raise interest rates next year. This will not immediately affect retail prices, but it may trigger rapid changes in consumer sentiment. Of course, maritime congestion will take some time to come. But if the’great shipping crisis in 2021′ proves to be the case, then the speed of the impact of shipping rates on the decline in demand will be a key indicator of the market’s responsiveness and competitiveness,” Hookham concluded.