Global Shipping Crisis Are Coming Back
Supply chain issues continue to plague the industry, while persistent inflation and conflict abroad could create additional market chaos. Here's what it means for distributors.
The global shipping crisis carried over into another month. February 2022 started with record year-over-year container import volumes versus 2021. February was consistent with logistics community expectations about strong demand and bookings in 2022. The economy and hiring also continue to be strong. Consumer expenditure data shows continued high demand for goods and supporting supply chain activity. Inflation and the Russia/Ukraine conflict could be the factors that depress the heightened consumer demand, but it’s too early to tell. The March update of the logistics and economic metrics Descartes is tracking point to a sustained impact on global supply chains…
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2022 supply chain shortages
Roughly two years into the pandemic, companies are still left wondering when supply chains will get back to "normal." Early indications suggest 2022 won't be that year.
Shortages, labor constraints, limited storage space and soaring delivery rates are all expected to continue and create headwinds for shippers this year at a time when demand still remains high.
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Inflation Pressure Hits New Warehouse Leases
Landlords are incorporating higher prices into increasingly expensive contracts, extending the rising costs in supply chains
Rental rates to replace expiring multiyear warehouse leases are rising at a sharp pace, according to a new report, as real-estate firms look to incorporate the higher prices they have taken during the pandemic into new contracts.
Prices to lease industrial properties are up an average of 25% over the rates at the end of five-year contracts that expired this year, according to a report real-estate firm CBRE Group Inc. released Monday. The increases, which come as strong consumer demand and a surge in e-commerce business have triggered a rush on distribution space, are extending higher supply-chain costs to customers that had long-term contracts that insulated them from the rising warehouse expenses.
“We don’t see any mitigation in demand for industrial space,” said John Morris, who leads industrial and logistics at CBRE, adding that the company has never seen increases this high.
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Few Truck Driver Adds Shortage and Delay Delivery
“The trucking industry has long churned through drivers, and the pandemic has made the job even harder
Truck driver Chris Wagner pulled his big rig into a grain processing plant in Sidney, Ohio, on a recent afternoon to pick up a load bound for the Chicago suburbs. He’d lost his scheduled place in line because of delays at an earlier delivery, so it was 10:45 p.m. before the plant was ready to load his trailer.
By then, the clock had run out on his federally mandated 14-hour workday, so Mr. Wagner couldn’t pull up to the dock. He slept that night in his truck on the plant’s lot and left empty-handed the following morning, unable to reschedule the pickup.”
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Steel and Wheels Holds the Global Supply Chain
Truckers in Southern California are struggling to move containers from port terminals and rail yards because of a shortage of the chassis that carry the boxes.
Transportation executives wrestling with the supply-chain gridlock that is frustrating U.S. importers say the ability to clear the bottlenecks rests largely on a simple piece of steel and wheels that has long been an afterthought in global shipping.
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Problems Escalate, Threatening Economic Recovery
Component shortages, surging prices of raw materials and transportation backups compound the bottlenecks .
Global supply-chain bottlenecks are feeding on one another, with shortages of components and surging prices of critical raw materials squeezing manufacturers around the world.
The supply shocks are already showing signs of choking off the recovery in some regions.
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PORTS in California are Busy
“A record-breaking number of cargo ships are off the coast of California, waiting to get into the ports of Los Angeles and Long Beach.
Over 60 ships are waiting to dock and unload, further contributing to supply chain issues and delays in the US. There are 146 total ships in the ports of Los Angeles and Long Beach, according to the Marine Exchange of Southern California. Of the 146 vessels, 92 are container ships…”
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U.S. Ports See Shipping Logjams Up Until 2022
“Leaders of some of the busiest U.S. ports expect congestion snarling maritime gateways to continue deep into next year, as the crush of goods from manufacturers and retailers looking to replenish depleted inventories pushes past shipping’s usual seasonal lulls.
Ports are already swamped by record numbers of containers reaching U.S. shores during this year’s peak shipping season, and the number of vessels waiting for berth space at Southern California’s gateways is growing as logjams stretch into warehouses and distribution networks across the country…”
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