Shipping Container Crisis Anticipated To Continue Until Mid-2022Mark
With 90% of the world’s goods transported by sea, the current shipping crisis has resulted in spiralling costs and bottlenecks in global supply chains. The situation has been exacerbated by a shortage of shipping containers and massive congestion at major ports.
The current shipping crisis is having the biggest impact on the used equipment sector, as major OEMs still tend to have stock on hand to tide them over during the current crisis. However, many shipping experts predict that lead times will only begin to stabilise in mid-2022. The shortage of shipping containers can be traced back to 2019, a relatively bad year for global trade due to strained relations between the US and China.
This standoff between two of the world’s largest economies resulted in fewer containers being produced in the run-up to 2020. However, Covid-19 then extended the lull in container manufacture throughout the first half of last year. Instead of dampening demand, the pandemic had the opposite effect and container prices skyrocketed, with some companies reportedly paying up to ten times more to import the same goods as before. The latest development is that some companies are opting to transport their goods via air, at more than double the pre-pandemic price.
If there is one thing that is certain about a crisis, it is that there is rarely anything that is certain about when it will end. Experts believe that product availability will continue to be difficult, especially in semiconductors and in items that require them as components. Prices of supplies will continue to be high and may even go higher in some raw materials, and companies will likely need to pass some of these onto their consumers.
However, container ports in the UK have become more resilient since the pandemic began and have identified a number of vulnerabilities in the countries supply chain.
The UK ports are at the upper end of being busy, most are between 70% and 80% full, and some have been running at 95% full. However, congestion is much worse at other ports around the world, especially in Chinese load ports and in discharge ports in southern California, where 80 vessels were waiting at anchor compared with one vessel off Felixstowe and none off London Gateway or Southampton recently.
Although this blog is quite negative regarding what we can all expect during 2022, we at Uneek Group believe that there is light at the end of the tunnel, and although prices and demand are still high, things will start to improve.
About Uneek Group
Does all of the above sound a bit worrying? Thankfully, Uneek Group has you covered. At Uneek Group, we have unprecedented experience in importing and freight forwarding.
Through our London Warehousing facilities, we are able to provide an efficient and cost-effective service that is driven by technology to meet your warehousing needs. We have 80,000 square feet of space across both of our London Warehousing sites. With one site situated next to Heathrow and the other conveniently located on A13, we offer fast access to central London, M25, London Gateway other major road networks.
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