Global Cargo Bottleneck expected into 2022
A global cargo bottleneck on the world’s roads, seas and air corridors could easily extend into next year, continuing to increase shipping costs, according to analysts.
The global air-freight and ocean markets have undergone tremendous turbulence since late 2019. This has promised to be a windfall for truckers, airlines and maritime shipping lines. Retailers, manufacturers and anyone else who pays to get goods across the globe will get pinched.
Annual U.S. contracts for long-haul trucking will probably rise in the low-double-digit percentages this year, driven by spot rates that have jumped 35% from a year ago. International Air-freight prices have doubled from a year ago, while Maritime rates have surged the most. The cost of shipping a 40-foot container from Hong Kong to Los Angeles has nearly quadrupled in the last year.
Covid-19 and its impact on citizens’ daily lives has led to an increase in money spent on home goods and general merchandise. Shortages of trucks and drivers, in some cases because of sickness or enhanced unemployment benefits, has contributed to supply-chain bottlenecks. So, too, has the reduction in airline flights, which reduced air cargo capacity globally.
The Port of Los Angeles, the busiest in the U.S., is operating above what is considered full capacity in a normal market. There is no fast way to recover. There are no extra ships waiting to be deployed. Customers that normally could book a container days before shipping now have to book weeks in advance. Some companies are turning to more-expensive air freight.