The future isn’t looking too bright for logistics companies—at least in the short term.
A recent poll by Container xChange reveals the gloomy outlook of respondents, where 53% of them feel that finding slots on vessels will be their biggest challenge in 2022, 54% predict that supply chain performance will remain bad, and 11% feel that it will get even worse. This has led to many in the industry looking for ways to restructure their strategies—with the looming threat of Omicron muddying the waters even more.
Meanwhile, thanks to an ongoing backlog at west coast ports—due in part to the record volume of shipping units they handled in 2021—the port director in Los Angeles is threatening to call in the National Guard. This is to deal with containers that have been sitting past their move-by dates and intensifying the congestion issues. San Pedro Bay ports are issuing their own threat of levying hefty fines against shippers that have long-dwelling containers in the port.
Analysts are predicting that dwell times are about to get even worse, with the issue spreading to ports around the world. Even though west coast ports have been working to move containers, dwell times for export boxes have been getting worse.
All this has led to good news for the air cargo industry as manufacturers look for faster ways to move their products. When the global Supplier Delivery Time Purchasing Managers Index (PMI) falls below 50, conditions are favorable for air cargo. The Index fell to 34.8 in October, so it’s good times for air cargo. Global air cargo saw an increase of between 7.9% for European carriers and 18.8% for North American carriers.
Wrapping up, the U.S. House of Representatives signed off on the Ocean Shipping Reform Act of 2021 last week. Its objective is to make the Federal Maritime Commission (FMC) “a more effective federal regulator.” In part, the goal is to require ocean carriers to meet minimum service standards and best practices, and for terminal operators to certify that their late fees are within federal regulations—or face penalties.
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