News / Getting space on ships next year the biggest worry for the logistics sector

Source BDP International

Securing space on containerships is viewed as the biggest challenge for the logistics sector going into 2022, according to an industry survey.

A poll of 800 logistics companies by online equipment trading platform Container xChange reveals that for 53% of respondents, finding slots on vessels is by far the biggest concern for businesses, followed by carrier surcharges, at 22%, and labour shortages, 19%.

“The survey results indicate that the industry is expecting gloomy times for container logistics,” says the report.

Container xChange said the industry was “downbeat” on the expected performance of the supply chain next year, with 54% of respondents expecting it to remain as bad, and 11% suggesting it will deteriorate further.

As a consequence, 71% of respondents to the poll said they were “rethinking their logistics strategy” and proactively seeking more sourcing options, while at the same time deciding to hold more inventory.

Moreover, to mitigate carrier equipment rationing, half were resorting to organising their own supply of boxes, opting for one-way leasing of containers, while 28% eyed negotiating longer-term lease hires directly with providers and 22% purchasing their own containers.

The inefficiencies of container lines in matching supply to demand was blamed by 28% of the respondents for box shortages, although “shippers using boxes as storage” was seen as the biggest culprit by 42%.

Perhaps a surprisingly low 75% of respondents said Covid had impacted their business, while 54% said the pandemic had resulted in lower profits.

Meanwhile, the arrival of the Omicron variant will add to the worries of logistics players, with the prospect of more supply chain disruption from port closures, lockdowns and vessel crew quarantines.

“We foresee that Covid and its new variants will continue to disrupt port operations and labour capacity as we progress into the year 2022,” said Christian Roeloffs, co-founder and joint CEO of Container xChange.

Nevertheless, he was more optimistic than the respondents to his company’s survey, suggesting a return to some form of normalisation could arrive as soon as H2 next year.

“The return to normal seems to be coming earlier than many of us first anticipated, and it might be as early as the second half of 2022,” said Mr Roeloffs.

In answer to survey question “who emerged as the biggest winner of the global supply chain crisis?”, 64% of respondents agreed it was container lines. And Container xChange joint CEO and co-founder Johannes Schlingmeier had some advice for ocean carriers in spending their bumper windfall profits wisely.

He said their billion-dollar profits should be “put to good use to improve service levels across the industry” and added: “This has to go beyond the traditional levers of investing in more container capacity, but also into landside infrastructure, inland transport and infrastructure for cross-industry collaboration to build resilience for the industry.”