In the pr evious three decades, supply chains have operated relatively smoothly because companies could source from around the world and not have to worry about global military conflict or autocratic regimes shutting down manufacturing. While international trade regulations were complicated to navigate, the world overall was trending toward larger, more open trading blocks – not just in North America, but in Europe and Asia as well.
The conventional wisdom at this time is that most of the world has moved on from the pandemic (except for China); therefore, supply chains will return to “normal.” Unfortunately, this is not the case. The world has permanently changed and supply chains are going to face continuing challenges for decades to come.
In a world faced with the prospect of tightening supplies, higher energy costs, heightened geopolitical risk, and strained transportation networks, ‘normal’ will be a temporary condition.
According to a Container xChange survey, forwarders, merchants and shippers expect the container peak season in 2022 to be even more chaotic than 2021. The pandemic has disrupted the usual seasonal swings in the container market as factories close, lockdowns spread, and congestion ensues. Facing another year of disruption, respondents turned to multiple strategies to get items to retailers in time for the fourth-quarter shopping season. About 37.5% of respondents said they will be shipping early in 2022 to ensure volume, 25% are using alternative shipping routes, and 18.8% are signing long-term contracts with carriers. load.
Returning to the current situation, 58% of respondents said that China’s Covid-19 lockdowns had made it “difficult to produce/ship many products as planned”. That added to concerns that a lifting of lockdowns in China could lead to a spike in exports, further disrupting supply chains to Europe and North America.