If anything this pandemic has taught us that we are all connected, and when I say all I refer to all countries and therefore human beings on the planet as one disruption to the old normal has proven to lead to a chain reaction affecting everyone. A great example that serves the purpose of the class is that according to shipping firm Ocean Network Express, congestion at ports in China and other parts of the world is clogging up around 10% of the worldwide container-ship fleet.
Jeremy Nixon, the chief executive officer of ONE, said at the Marine Money conference in Singapore that ships are “locked up waiting in crowded locations” and using a lot of fuel. “If we can clear that bottleneck, we’ll be able to get services back on track.” To put this into figures Bloomberg calculated that more than 500 ships are stuck in port lineups.
As the health crisis approaches its third year, labor shortages and logistical issues continue to disrupt global supply chains, with interruptions varying from destination to destination. Despite the fact that congestion on the US West Coast has alleviated slightly after months of severe delays, logjams have formed at ports all over the United States.
Meanwhile, analysts say that lockdowns in Shanghai, Shenzhen, and other Chinese cities have resulted in massive ship lines off the coast of China, predicting additional delays in exporting products and increased freight charges in the coming months.
According to statistics from Sea-Intelligence, a near-record 12 percent of worldwide container vessel capacity was “lost” in February due to delays. The situation is unlikely to improve considerably in the near future, as enterprises in Shanghai prepare for the potential of protracted lockdowns as the number of viral cases rises.
For American and European firms that rely on Chinese suppliers, this will entail greater challenges. Government-ordered shutdowns and the difficulty to get supplies have hindered production, according to 60% of respondents questioned by AmCham China, while transportation and shipping network delays have impacted 86 percent of enterprises’ supply chains.
“It’s almost like being stuck in traffic,” Container xChange CEO Christian Roeloffs stated. “The transpacific congestion problem will not improve considerably since it is virtually like a start-stop situation.
References:
The blog of Logistics at MGEPS at UPV 