The ongoing threat from the pandemic and the fractured nature of containerized supply chains mean there is unlikely to be any easing in the market before 2023 at the earliest. “Our previous position was that supply chain disruption would be cleared by the second quarter of 2022 but that is now extended to the end of next year,” said Drewry container research manager Simon Heaney. He said the global health crisis had had a devastating effect on every single link in the global supply chain. “Even nearly two years into the pandemic, it still carries the greatest uncertainty,” he told a webinar. “We had expected to see more progress by now, but supply chain efficiency has deteriorated. That is attributable to several factors, such as China’s zero-Covid policy and some extreme weather events that threw off operations.”

A rising number of delta variant cases increased the risk level for further logistics capacity to be restricted. That would be especially true if official responses in some territories were not relaxed. Countries with the highest vaccination rates will be the least strict in terms of their responses and the impact of that on logistics capacity. But the pandemic had also accelerated “latent crises” within certain sectors, Mr Heaney said. “The problems go deeper than originally feared. Normally a localized issue could be worked around, but because this affects every aspect of the supply chain there really are no simple fixes and the problem has been magnified.” Resolving the situation would take both luck — avoiding another spike in cases, extreme weather events or another Suez incident — and investment.

“It is also going to take time to add more logistics capacity where it is needed, and that is pretty much everywhere. The issues in the supply chain were caused by no one sector, nor could one group fix it alone. It is natural to look at carrier profits, and most of the ire has been thrown their way, particularly from BCOs, but carriers are not to blame,” said Mr Heaney. “It is not their fault that because ports keep them waiting sailing schedules are in disarray. But it is also not the fault of ports and terminals that they have become parking lots for ships and boxes.”

The pandemic had stripped away ports’ ability to turn boxes efficiently, due to there being fewer truck drivers and lower amounts of warehousing space. “Each sector is going to have their own plans to manage the situation, but they are working in silos. The lack of joined up thinking is another reason we are less optimistic about a solution being found in the short term.” That meant there would be no supply chain recovery before 2023, he added.

On a more positive note, goods were still getting through, albeit more slowly. “We now expect world port handling to increase by 8.2% this year, up 7.9% from 2019,” he said. “It is a significant uptick in volumes.” Nevertheless, this was lower growth than Drewry had earlier forecast due to increasing bottlenecks and poorer economic indicators. Next year should see volumes grow by another 5.2%, but this too was threatened by rising inflationary pressures, partly because of supply chain disruption.

“More inflation could potentially strip away some of the discretionary buying power consumers have,” he said. “It is difficult to tell if the supply chain chaos has curbed growth by denying some importers and exporters access to market or if it has acted as an accelerant, as many shippers are panic buying.” Other risks included cargo demand growth petering, particularly if tighter monetary policies are introduced to curb inflation. “It is also possible a looming energy crisis could derail some of the economic recovery we have seen thus far. On the flip side this could be positive for the supply chain recovery as it would ease the capacity constraints.”