Commentary: As ports strain under surge in orders, when will supply chains return to normal?

PLYMOUTH, England: Several months ago, I warned that the crisis in container ships could jeopardise Christmas by leaving retailers without enough goods on their shelves.

Since then, there have been similar fears all over the media, not only due to shipping problems but also shortages of lorry drivers and unavailable products. As we approach November, the worst may be coming to the worst.

It is a classic supply and demand mismatch. On the one hand, people around the world managed to save over US$5 trillion (£3.6 trillion) during the lockdowns, and have been wanting to spend some of it now that restrictions have been lifted.

This is why the global economy has seen a strong recovery in 2021, with the IMF predicting that global growth will be 6 per cent for the year as a whole.

According to an intelligence report shared by a shipping broker, that extra demand translated into over 119 million shipping containers between January and August, 6 per cent higher than the equivalent period in 2019.

SUPPLY CHAINS STRUGGLING TO COPE

Supply chains have not been coping with this surge in orders. Ports have been struggling to load and unload container ships quickly enough, with nearly 600 container ships stuck outside docking areas around the world – nearly double the number at the start of the year.

Ports are understaffed because many workers are being kept off site by COVID-19 restrictions. There are not nearly enough containers, because ships that would normally pick up empty containers to return to ports in Asia have been sailing back empty-handed instead to minimise delays.

There are also not enough lorry drivers in numerous countries. It has become well known that the UK is short by some 100,000 drivers, partly because of Brexit, but Germany is short by around 80,000 drivers, while the EU as a whole is short by 400,000. This is making the problems with containers worse.

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