The supply chain crisis is far from over… set to deteriorate and push inflation even higher

The outbreak of the pandemic and the closure of many ports in the region led to the diversion of many container ships to the port of Walvis Bay. This, in turn, provided the Namibia Ports Authority (NamPort) with an opportunity to showcase its world-class productivity and efficiency as one of the best ports in Africa.

However, logistics analysts are now predicting that global supply lines will take at least nine months to rectify current delays, driving up the cost of goods globally. This is when global shipping companies continue to rake in huge profits due to escalating costs of transporting goods. Indeed, according to Freightos Shipping Index.

Supply chain specialists also warned they expected conditions to deteriorate, reversing the recent improvement in container ship backlogs and making it harder to fight inflation.

During an exclusive interview with New Era last week, NamPort spokesperson Taná Pesat explained that a global container shortage has actually exacerbated costly supply chain delays in all parts of the world. world.

Pesat noted that initial supply line stresses occurred on the China-United States of America (US) route due to the pandemic. “With the onset of the pandemic, many Americans were working from home and buying more home office furniture and related items. That meant more containers were moving to the United States,” she said.

She added that this factor, combined with port closures due to Covid-19 outbreaks, meant that goods were produced but could not be transported due to massive congestion on all shipping routes.

Pesat continued that the current rising number of Covid cases in China and Europe is certainly not a good sign for global shipping lines. This has dashed hopes of a return this year to reliable smoothing of freight shipments, and continues to put considerable pressure on consumer prices.

Coupled with the war in Ukraine, this affects Namibian imports of everything from sulfur for the mining industry to cooking oil for household consumption.

The fallout from the war in Ukraine and a coronavirus outbreak in the heartland of Chinese industry are creating new problems in global supply chains,

Financial sanctions and the closure of Russian airspace are also forcing cargo planes to fly longer, making transport from Asia to Europe more expensive, while triple-digit oil prices are inflating fuel bills from ocean carriers and truckers.

Last week, Maersk, the world’s second-largest cargo carrier, warned of the “unpredictable operational impacts” of the Russian-Ukrainian war, while in southern China waiting times increased for ships trying to dock in ports.

“What people expected to be a year of recovery is going to be another year of crazy hiccups in supply chains,” said Johannes Schlingmeier, managing director of xChange, a shipping container leasing company in Germany.

Meanwhile, major Chinese ports remain open and ships continue to dock. But congestion is building and some container ships are re-routing to avoid expected delays, according to shipowners, analysts and supply chain officials.

“This implies that it will become difficult to get goods to and from ports. Therefore, whether the terminals are open or not becomes a moot point. This will have a disruptive impact on the supply chain, in turn extending the current supply chain crisis.

2022-03-22 Edgard Brandt

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