No light at the end of the tunnel for global logistics till 1H22

The challenges faced in the global logistics sector in 2021 likely to spill over to 2022 as well, while pressure on global supply chains is expected to continue. 

A special report compiled by the Logistics Management magazine, United States, pointed out that the light at the end of the tunnel is not to be expected until the second half of the year at the earliest. 

“The consensus is that the pressure on the ocean freight market will continue in 2022, and freight rates are unlikely to fall back to pre-COVID levels. 

“Capacity problems and congestion in the ports will continue to combine with strong global demand in the consumer goods sector,” the special report titled ‘Global Logistics 2022: Is this the new normal?’ highlighted. 

Logistics Management, quoting German economist Monika Schnitzer, said that the current Omicron variant will have a further impact on global shipping times in the coming months. 

“This could exacerbate the already existing delivery bottlenecks. Shipping times from China to the United States have already increased from 85 days to 100 days due to the Delta variant, and that could increase again. 

“Europe is also affected by these problems, as the situation remains tense,” Schnitzer said, as quoted in the report. 

However, while shippers were under pressure, 2021 was a prosperous year for container carriers. 

According to a forecast by the shipping intelligence provider Alphaliner, the 10 leading publicly listed container shipping lines are on track to earn a record US $ 115 billion to US $120 billion profit in 2021. 

This is a windfall that could transform the structure of the industry as those earnings are reinvested,  Alphaliner said. 

The sector also benefited from the fast recovery of production in Asia and strong demand in Europe and the United States. 

Ocean freight rates nearly doubled last year due to shortages in container capacity, and early forecasts indicate that the rates are likely to reach much higher levels in 2022.