- “Supply chain” has become a political topic or even a popular meme? Exceed.
- You can still see cargo moving like snakes in the global transportation system, with ships unloading and loading containers.
- Clearing the backlog may seem slow. But the worst is over.
A recent news article published in the BusinessPress states that the worst supply chain crisis is over.
The economic recession
After most of the delayed deliveries are completed, maybe after the Chinese New Year in February, then we can move on to the next political topic and meme: the economic recession.
After all, if it turns out that consumers are ordering too much in 2020 and 2021, why bother to order new products?
Shockproof barcode reader
I will not draw conclusions easily. After checking so many port data, I was holding a shockproof barcode reader in my hand when I was dreaming.
The stocks of major listed container shipping companies such as Maersk, Yixing Integrated Shipping Services and Danaus Line fell almost simultaneously in late September.
Container traffic in the Port of Hamburg
Container traffic in the Port of Hamburg reached its peak in the first quarter of 2021.
According to data from the last public report, the container traffic at the Port of Rotterdam only increased by 0.7% between January and March.
This shows that not much backlog was cleared at that time.
Inbound containers loaded into Long Beach
Inbound containers loaded into Long Beach, California peaked in May at 444,736. By August, this number had dropped to 407,426.
Similarly, outbound empty containers in Long Beach peaked at 313,070 in May and dropped to 268,505 in August.
In Singapore, the Maritime and Port Authority set the peak post-pandemic container throughput in March, reaching 3.3 million 20-foot container units.
The last major outage in China, the closure of the port of Ningbo in China related to the pandemic, appears to have ended on August 25.
Shipping container freight rates are still high, ship sales are booming, and old container ships have been pulled off the scrap queue and put into production again.
Profitable contracts for years
Shipowners have locked in profitable contracts for years, as long as they can collect payments on the invoice, that’s it.
Always one step behind, governments all hope to get a larger share of the excess profits. We will wait and see.
Do they also want to pay for excess losses when transactions decrease? Maybe not.
Lars Jensen, a container expert at Vespucci Maritime in Copenhagen, performed well during the pandemic.
I caught him in Kenya when he was disconnecting from the grid and preparing for a long-awaited safari trip. “I agree with you,” he said, “unless another round of virus-related port closures in China.”
The virus that led to the closure of ports
Such a shutdown seems unlikely, at least in a rational view. Compared with the zero tolerance response to the virus that led to the closure of ports, China’s future Covid-19 control plan may be more subtle.
To my surprise, the shipping industry does not seem to order new ships with the enthusiasm and debt level of the past boom.
I was told that the next trend is for shipowners, port operators and logistics managers to conduct more intensive automation and systematic data analysis and exchange in the next few years.
Integration of the shipping industry
With all the integration of the shipping industry, in my opinion, the trend of industry division of information is outdated.
For example, it’s time to put things like radio frequency identification tags on all goods, even though I know that battery life and fire safety are a consideration.
Data should be easier to exchange without compromising customer privacy.
I hope they treat their crew better in the next cycle. Many people have not gone ashore for more than a year, let alone go home.
The prospect of inventory decline
But before that, there is the prospect of inventory decline. When all goods are delivered by retired truck drivers, there will be a large amount of goods around the world that will not be reordered soon.
This week, the Federal Reserve Bank of Atlanta announced its estimates for the third quarter of US economic growth. 1.3%, which means real negative growth after deducting inflation.
There are more people in need of work now, and maybe others will be less willing to give up work.
The impact of the pandemic on the trade and transportation of goods will continue for decades.
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Source: Businesspress
