What should companies sourcing from overseas consider this year? Shypple has listed the four forecasts that will affect the shipment of goods the most. They also touch on a topic that deserves more attention, says the Dutch logistics company.
“Businesses and consumers are eagerly following the global freight transport fiasco. People expect their products to be delivered faster. Yet the global shipping network is facing delays upon delays. And container prices continue to rise. All of this affects delivery times and consumer prices,” Shipple writes.
“The sector is, more than ever, subject to frequently changing situations. These create uncertainty. The logistics industry continues to grow, and it is under pressure. The Ever Given blockage of the Suez Canal (March 2021) shows how a single incident can burst this barrage of the already full transport chain.Nevertheless, the Suez Canal welcomed ten times more ships last year than in 2020 (20,649 against 18,830) . And that’s despite the Ever Given incident. And there are things that are going to determine delivery times and supply prices.”
Here are four predictions that Shypple considers the most impactful:
1) Pandemic closures mean volatile shipping routes
“This has already happened the very first week of January in Ningbo. This city is close to Shanghai and is China’s second-largest port. Quarantine measures and limited access to terminals are causing significant delays in container shipments “.
“Last year, cities and ports were unexpectedly locked down more often. China is the world’s largest exporting country. It has a ‘zero tolerance’ approach to COVID -19.And virtually all other countries are also regularly adjusting their As the pandemic continues, the industry is facing ever-changing situations.These are creating bottlenecks and delays.Therefore, any order may take longer to arrive.
2) Impact of major events like Chinese New Year and Winter Olympics
“In the Netherlands, transport chains are strained between Black Friday and Christmas. The same is expected to happen in the East in early February. But on a much larger scale. This year, Chinese New Year coincides almost exactly with the Winter Olympics. And China is hosting this event.”
“Many Chinese businesses usually close around Chinese New Year. This affects the transportation chain and deliveries. One of the biggest sporting events in the world will only add to this. There is a real possibility that many high-polluting factories in China have to shut down. This is to reduce emissions while athletes compete in this country. These and other similar events definitely affect the supply of goods, in this case from China .
3) Container prices keep rising
“And according to experts, we’d better get used to it, for now. The Shanghai Container Freight Index is a key trade indicator. It shows weekly prices for containerized freight from ten Chinese ports on routes standard worldwide. These prices have increased from around €1,500 to around €7,783 over the past two years. Experts believe this could have a huge effect on buyers’ wallets.”
4) Ever increasing delays
“There are bottlenecks in the transport sector. And there is an increase in consumer demand. Both of these factors lead to massive delays in the supply of goods. The average delay per container was approximately half a day in January 2019. It was more than a week at the end of 2021. This makes the freight forwarding network increasingly vulnerable.
Shypple ends his blog with a topic that would be great to see more of in 2022, but sadly there’s still a long way to go. “Shipping emits around 2.5% of all annual greenhouse gases, primarily because it depends on fossil fuels. To counter this environmental impact, the industry must find ways to reduce its carbon footprint.”
“We need to better understand carbon emissions and focus on more sustainable choices for transporting goods. At Shypple, we are taking the first steps. We are promoting the least polluting booking option and more biofuel crossings. We also recommend compensation programs. But there is still a long way to go to clean up the industry.”
“Current developments mean that shippers depend on and benefit from real-time freight insights. Digital freight forwarders, like us, offer this. Shippers, business owners and consumers can therefore anticipate all planned and unplanned events. that affect delivery. They can effectively manage price fluctuations and delays. And they can be more aware of sustainable transportation options. And that’s a big step toward a cleaner, more flexible network for shipping goods. concludes Shypple.