Out of Stock: Update on F&A Logistics
Despite logistic operators’ best efforts to restore normalcy to global supply chains, disruptions will continue to be on the menu for 2022.
- Strong global retail demand and imbalances in container distribution will keep exerting pressure on ocean shipping. Though there’s limited room for more rate growth, we still expect high rates and low reliability to challenge the market over the next six to twelve months.
- Increasing refrigerated container (reefer) rates in 2022, along with prolonged tight reefer availability, will be hitting the upcoming food export season of countries in Central and South America.
- Food trade managed to stay strong during the pandemic, with increasing volumes traded on a global scale. Yet it’s threatened by the reefer imbalance.
- The trucking sector is also contributing to the instability, mainly due to aggravation of structurally low labor availability, which will push road transport rates higher in 2022 as well.
Solutions are not easy to find. Relief might come from the growing reefer production, but extra capacity will be effective only if the container distribution problem is under control. Similarly, record orders for new vessels in 2021 will only increase volumes in the medium term.
Where to go from here
Xinnan LiAnalyst – F&A Supply Chains Read more