Parcel delivery company DHL, part of Deutsche Post, expects that disruptions in the transport chain will not be fully resolved next year. Port congestion should ease next year as more new container ships arrive, according to the German company, but that is not yet enough to allow the global supply chain to recover from pre-coronavirus conditions.
“It will go down in 2023, but it won’t go back to 2019,” said Tim Sharwath, head of freight at DHL. “I don’t think we will go back to the overcapacity situation where rates were so low. Infrastructure, especially in the US, is not going to improve overnight because it takes a long time to develop infrastructure,” Sharwath said.
The coronavirus pandemic and restrictions to contain the virus led to a shortage of workers and truck drivers at several major ports around the world last year. As a result, freight traffic to and from shipping hubs has slowed and container rates have risen to record levels.
While the situation has improved in most places with workers returning, the supply chain remains under pressure from problems in the main port of Shanghai, where backlogs are cleared after a two-month shutdown in the Chinese city.
Sharwath said the reopening of the Shanghai port comes as more goods are shipped from Asia to the US and Europe ahead of the important holiday season in the West at the end of the year. The National Retail Federation, the major retail trade organisation, has warned that US ports should prepare for a sharp increase in imports in the coming months.
In large European ports such as Hamburg and Rotterdam, according to Sharwath, congestion is increasing due to the arrival of more ships from Asia. He said the South Korean truck drivers’ strike was adding pressure on the supply chain.
“Any congestion, no matter where in the world it is located, will affect other parts of the supply chain,” he warned. Five years ago, the situation in South Korea had no effect. Now that is the case.” Container carriers have requested more new vessels during the pandemic, managing to post record profits after years of losses thanks to historically high transport rates.
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