Posted on 08/27/2021 4:58:14 AM PDT by blam
The complex web of seaports, container ships, and trucking companies that move goods worldwide remains deeply tangled.
More than 18 months since the virus pandemic forced governments to shut down their economies and, in return, disrupt global supply chains. The emergence of the Delta variant has metastasized into more logistical hell for shippers.
Bloomberg spoke with companies on the front line of production and transportation to gather intel of what was happening on the ground. What they discovered was increasing supply chain disruption that will persist through 2022.
“We do not expect freight rates to stabilize in the near term,” according to Karsten Michaelis, head of ocean freight at DHL Global Forwarding Asia Pacific.
“The combination of a year of disruption, lack of containers, port congestions and a shortage of vessels in the right positions is creating a situation where cargo demand far exceeds available capacity.”
Michaelis said his customers had been given alternative routes and modes of transport to navigate the turmoil. “We have to be prepared that costs will stay at elevated levels and are not expected to go back to pre-Covid levels,” he said.
Global container prices are at record highs.
Michaelis said the seasonal surge for holiday goods has already begun and will keep ocean freight “tight” for the remainder of the year.
“Capacity planning for the Christmas season has started much earlier this year because capacity is so tight in ocean freight,” he said. “We are seeing some customers even planning to fly in typical seasonal goods just to make sure they are on stock/in store on time.”
In a series of shipping notes, titled “California Congestion Nears New High, East Coast Gridlock Worsens” and “US West Coast Port Congestion At Record High Amid Transpacific Trade Route Disruptions,” we outlined congestion at US West and East Coast ports is mounting once more.
The latest word from the frontlines is that supply chains disruptions are not waning anytime soon and will pressure consumer prices higher. So much for the Federal Reserve’s “transitory” narrative
It was a choice.
COLOCATION PEOPLE!
The Labor cost in Mexico is cheaper than the labor cost in China for light manufacturing. Mexico is the perfect trading partner with the US. They can do low end and we can do middle and high end.
Transportation costs had been declining for decades before COVID. Even during periods of high fuel prices, the cost of freight transportation was a very small component of the price of a typical product sold in the U.S. And that component was slowly shrinking over time.
"More than 18 months since the virus pandemic forced governments to shut down their economies and, in return, disrupt global supply chains.
The emergence of the Delta variant has metastasized into more logistical hell for shippers.
Bloomberg spoke with companies on the front line of production and transportation to gather intel of what was happening on the ground.
What they discovered was increasing supply chain disruption that will persist through 2022.
“We do not expect freight rates to stabilize in the near term,”..
The latest word from the frontlines is that supply chains disruptions are not waning anytime soon and will pressure consumer prices higher.
So much for the Federal Reserve’s “transitory” narrative "
IOW, beatings will continue until morale improves.
Hasn’t worked on us.
Bleep ‘em.
I believe manufacturing for all of us here, versus China, was part of the long-range plan when our REAL President Trump got rid of NAFTA and went to the USMCA.
Of course there would be whining by the Commies in Canada, but the North American CONTINENT should be the wealthiest in the world. Funny how you extend the generous hand of Capitalism to some, and they bite it right off.
I’ll never understand it.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.