The container shipping supply chain will still be affected in 2022
Market research firm IHSMarkit pointed out in the latest report "Supply Chain Disruption: Why It Will Continue to Happen in 2022" that in 2022, solving the problem of supply chain disruption will no longer be a "sprint" model, but will evolve into a well-run " Marathon" schedule mode.
Daniel Yergin, vice-chairman and vice-chairman of IHS Markit, said: “The changes taking place in global supply chains are not only disruptive, they are historic. The focus on inflation also adds to the urgency of understanding the outlook for supply chains in 2022. "
While the outbreak has been an important factor driving disruption, such as the current Omicron strain creating new uncertainty, it is not the only factor, the report said. In addition to the pandemic, there are numerous challenges for capacity building, logistics and workforce.
The report is divided into chapters to detail the manufacturing, ports and other fields. On the manufacturing side, the report argues that there are now early signs of normalization following the unprecedented supply disruptions in 2021; however, with regard to severely congested ports, there is no guarantee that the sector will recover quickly, at least in the first half of 2022. to pre-pandemic levels.
Early signs of normalisation in manufacturing
The report pointed out that in 2021, the global manufacturing delivery time will be significantly longer. In January 2022, many more companies reported severe output constraints, input costs rose at a record rate in the pre-pandemic decade, and the Omicron strain brought new uncertainty.
Container shipping: supply chains still affected by 2022
In the maritime sector, the container shipping supply chain is still in the midst of its worst crisis ever at the start of 2022, and it may take months to unwind.
During the 2020 lockdown, the report said, as U.S. consumer spending shifted from services (travel, leisure and entertainment) to home improvements, the container supply chain, from brick-and-mortar stores to e-commerce, was immediately placed under unprecedented strain. . E-commerce growth that was supposed to take place in five to seven years has been squeezed into one year. E-commerce requires distribution centers, and the capabilities of distribution centers cannot match. But even now, the U.S. is still unprepared in terms of distribution capabilities.
Second, a number of stimulus programs launched by the U.S. government have boosted spending power. This has resulted in a nearly 20% increase in U.S. containerized imports in 2021 compared to 2019. However, in this situation, the shortage of shipping capacity has exacerbated the crisis in the container supply chain.
Both ocean carriers and forwarders said there were enough ships and containers to handle the surge in demand, the report said. But the problem is that the capacity is not being used effectively and the cycle is slow.
The report estimates that 10-15% of capacity is wasted due to congestion. This is evident in freight rates: spot container freight rates have risen three to five times compared to the previous year.
Peter Tirschwell, vice-president for marine and trade at IHS Markit, said that while there had been some news in the past few weeks that the supply chain crisis was easing, there had been no evidence of this, at least in containers, after 2022 began. Liquidity is yet to be seen.
Tashville said a recurring problem since the pandemic is that after a shock, the overall maritime system is difficult to recover, and then the next shock will come.
For example, the system has no chance of recovering from the six-day closure of the Suez Canal in March 2021. He explained that new disruptions, such as the Omicron strain, could further disrupt the system and create a "hard-to-get" phenomenon for containers. For this reason, it is still unlikely that the maritime industry will return to its pre-pandemic state until at least the first half of 2022.
