Towards the end of 2021, more and more supply bottlenecks in retail are becoming noticeable. Now experts are issuing a warning. The bottlenecks are expected to continue into 2022. Read what consumers need to know here.
The companies are missing parts and the bike that was ordered is months late. When global transport chains otherwise run like clockwork, there is a great deal of confusion in the Corona pandemic — much to the chagrin of businesses and consumers, who are putting their patience to the test over material shortages and delivery issues. Economists and logistics experts predict that the problems will continue in 2022. As amazing as the photos of the day-long accident of the Megamax “Ever Given” freighter in the Suez Canal in March: the problem is more urgent than can be explained by the sinking of only one ship.
“Unfortunately, it is not clear when the situation in the supply chains will improve in the long term. But I am sure that once the epidemic is defeated, when that happens, everything will flow better again,” says the new president, German Shipowners Association, Gabe Bornheim, German news agency. “It is clear that the strained supply chains are the result of the Corona pandemic. Because of this pandemic, we have a unique situation where many are coming together,” Bornheim said.
“We still cannot get our seafarers as we used to and we cannot get them off the ship unimpeded,” said Hamburg-based Peter Döhle Schiffahrts-KG, one of Germany’s largest shipping companies. “There are significant restrictions that change at individual ports on a weekly basis, sometimes daily, so that we do not have certainty that we can now make changes to the crew in many parts of the world.”
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Delivery bottlenecks in 2022: Ports and containers as bottlenecks
For a long time, lost containers were also a big problem because the transfer boxes were not where they were supposed to be for reloading due to delays in schedules. At Hapag-Lloyd, for example, containers are usually on the road for 50 days before being reloaded, but take more than 60 days due to congestion at the ports. To make up for this, the large shipping company in Hamburg alone has purchased a total of 625,000 new transport boxes since 2020.
Finally, several ports have proven to be a huge bottleneck – especially those on the Chinese coast and the US West Coast, where huge trade flows between the two largest economies are handled. In China, ports have been repeatedly closed in whole or in part due to the infection of port workers with the Corona virus. Ships have to wait days to load and unload or have to switch to other ports, which also creates major traffic jams. Due to the very stern reaction of the Chinese authorities and the unprecedented speed of the spread of the Corona Omicron variant, it is likely that closed port terminals in China will remain an issue in 2022.
There are also large numbers of ships on the road in front of the Port of Los Angeles and in the immediate vicinity of Long Beach, the two most important ports on the West Coast of the United States. And in the fall there were sometimes as many as 100 ships. In addition, inland traffic is not working as it should either due to not enough truck drivers. US President Joe Biden made the port problem a top priority in the fall and managed to get the Port of Los Angeles to operate seven days a week and at night.
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Lots of goods get stuck in the sea
Economist Vincent Stammer, who regularly analyzes global ship movements at the Kiel Institute for the World Economy, estimates that more than 11 percent of freight shipped worldwide is currently parked on stationary vessels — a huge amount, considering that 90 percent of the flow Global cargo transported by container ships. German seaports are not at risk of congestion because they are the last stop on the main global routes for shipping companies.
Towards the end of the year, Stammer noticed a slight decrease in traffic jams. But: “It can be assumed that the easing of congestion in container shipping is a result of weaker trading activity, rather than a reflection of the trend towards more flexible operations.” The first improvement can be seen in February. “Although demand remains high, we hope that after the Chinese New Year there will be the first signs of a gradual easing of pressure in supply chains,” Hapag-Lloyd wrote in a letter to customers at the start of the year.
Stamer also sees the New Year celebrations in China as the first significant milestone. The festival is traditionally the peak of consumption in the world’s most populous country, after which consumer demand subsides dramatically. Kiel’s economist predicts that it will likely take some time before the global supply network sways again.
As early as the summer of 2021, the leading associations in the German economy complained about the situation in an open letter to the then federal government: the rise of industry after the Corona recession in 2020 faltered. There has been talk of a lack of container availability, a lack of transport capacity, indefinite vessel arrivals, and sharply rising transportation costs, particularly on routes between Asia, North America and Europe.
However, the shipping industry does not want to leave the accusation standing, especially since fleets shrank in Germany after the financial crisis, but grew globally. “Everyone knows we don’t hide ships and we don’t hide boxes either,” said Rolf Habin Jansen, President of Hapag-Lloyd, in a public discussion with experts from the logistics industry.
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