Supply chain problems and port congestion are now even getting attention from the Central Banks, due to the effects these have on inflation. Federal Reserve Chairman Jerome Powell recently stated: “It is frustrating to see the bottlenecks and supply chain problems not getting better. In fact … [they are] apparently getting worse.” Powell expects supply chain woes: "To continue into next year, probably, and holding up inflation longer than we thought."
Industry experts are increasingly talking about a scenario in which high ocean shipping costs and congestion could persist throughout next year, if not into the following year.
Nerijus Poskus, vice president of global ocean at digital freight forwarder Flexport, stated: “We have been in a never-ending peak season. In my opinion, peak season is when there is less supply than demand and there is a backlog building somewhere and I think we have been in it ever since COVID hit.”
“I would say that the shippers that don’t have enough inventory at this time are going to sell out prior to Christmas because of all of the delays,” Poskus said, adding that the current lead time for cargo from Asia to inland U.S. points using non-premium ocean and rail can now be over 100 days.
“I think this chaos will last well into 2022. [Shippers] should expect that the whole of 2022 may be another peak season,” he said, adding, “Importers should expect the spot market to remain high for 2022.”
Source: freightwaves.com
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