Things aren’t getting better in China. Export continues to be gravely impacted by ongoing lockdowns, and a 3-day holiday weekend is expected to make things worse. The good news is some parts of Shanghai are opening up, although it seems to be intermittent. As rules change and circumstances fluctuate, so do the openings. Truckers are still forced to take daily PCR tests and there are delays of up to a week before ships can get a call at the quay.
As everyone in the industry knows by now, the situation in China is not only having a domestic impact. Local manufacturers are facing difficulties in sourcing supplies and ports continue to face disruption. Globally, shipping container rates are in flux, and ports in both Europe and the US are preparing for an impending wave of backlogs.
It shouldn’t come as a surprise to anyone that the IMF agrees there is a correlation between inflation and the current volatility of global shipping costs. Consider that about 80% of goods traded globally travel by ocean in containers and the cost of shipping has seen a sharp increase. Unfortunately, the IMF also expects that the situation will only get worse.
Moving to the ongoing crisis in Russia and Ukraine, the situation there has added to an already burdened supply chain. Air cargo is disrupted as airlines need to adjust their operations, in some cases canceling flights entirely. Add the rising cost of fuel to that, and the fact that the two countries supply most, if not all, of the industry’s extra-large cargo fleets.
Finally, the IMF is pushing for excessive dwell fees to be included in demurrage regulations. Excessive dwell and demurrage fees have become a point of contention, with the National Shipper Advisory Committee (NSAC) approving a recommendation to push back against any additional charges—charges that marine terminal operators say are necessary. Many shippers claim that while they are willing to pay fees for boxes that aren’t picked up, the extra fees that terminal operators are trying to levy against them are simply unfair.
