Transportation Update

Every month seems different from the last, with the volatile nature of the world’s economy and the pandemic continuing to impact different aspects of the world, we are providing you with a transportation update. Let us take you through each type of freight service and the issues affecting different parts of the world presently.

 

In terms of an air transportation update, air freight capacity restrictions and not to mention high air freight rates are expected to continue with the continuing impact of the pandemic. Whilst demand increased to 18.7% in 2021 since the prior year, capacity was still low. These constraints may continue well into this year due to various roadblocks/bottlenecks at key shipment hubs and due to staff shortages. Further, freight rates which were over 150% more than 2019 may continue to rise. Air freight rates in the first two weeks of the new year rose 40% compared to that of the same period the prior year. From staff shortages, restrictions, quarantine procedures, port/hub congestions and more, the situation may continue to escalate.

When looking at sea freight’s transportation update, the expected return to some form of normalcy has been stalled with the omicron variant, with port/container delays mounting up to a week-long congestion.

Further in terms of the road transportation update, staff and driver shortages are a true problem, as movement of freight/cargo between key points in the supply chain are also getting delayed due to lack of manpower and capacity issues. The short gap between Christmas and the Chinese Lunar New Year also saw turnaround times delayed further with multiple bottlenecks due to the surge in volume yet inability to clear the goods due to various reasons.

These included insufficient staffing at different points in the supply chain during holidays, infrastructure locations closed for periods of time, shortages in trucks/drivers, empty container issues, ports and airport hub closures, delays in customs clearances, pandemic related travel restrictions that are suddenly imposed, and further quarantine and testing requirements in the wake of the pandemic. Thus, in terms of a transportation update based on all these factors, we expect delays in communication, shipments and not to mention production too.

How are your businesses coping in the time of the pandemic, as we move into the third year of its impact?