So far, 2021 has been a boon and disaster for shippers worldwide with record demand for an unreliable supply chain. Never has there been a time when container reliability has been so low yet freight rates remain so high. With even the Federal Reserve Chairman Jerome Powell lamenting “it is frustrating to see the bottlenecks and supply chain problems not getting better. In fact … [they are] apparently getting worse”, it seems like the whole world knows about the issues plaguing the global supply chain.
In the short term, it seems American consumers don’t need to worry about inflation, but Powell is worried about supply chain woes “continuing into next year…holding up inflation longer than we thought.” With China celebrating its Golden Week holiday, freight rates are at another “all-time high”. This is great news for liner operators and carriers, but port congestion is still a pressing concern for everyone.
In this seemingly-unending peak season, Nerijus Poskus, Vice President of Flexport comments “In my opinion, peak season is when there is less supply than demand and there is a backlog building somewhere. And I think we have been in it ever since COVID hit…I think this chaos will last well into 2022. [Shippers] should expect that the whole of 2022 may be another peak season.”
Gene Seroka, Port of Los Angeles’ Executive Director, sees “a very strong market through the end of this year into Lunar New Year…[which is] the first week of February.” However, a major cause of concern is with the impending energy supply issue in both China and Europe limiting major manufacturers. This could end up very badly for the global economy and the supply chain as a whole as it moves into 2022 and 2023.
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