The current disruption to cargo has surpassed March’s Suez Canal disaster. What does this mean for the shipping industry, businesses and consumers?
Well, be prepared for weeks on end of delays – and that’s just the beginning of this supply chain nightmare.
“WORSE THAN THE SUEZ CANAL’
Amazon Prime Day is coming up next week and it’s the biggest day of the year for the online retail giant.
As consumers increasingly turn to online retail, are freighting companies keeping up with demand?
Why are freight companies under stress?
In the wake of one of China’s busiest shipping ports closing down last month due to a COVID-outbreak, freighting companies find themselves at breaking point.
With the industry just getting back on its feet following the Suez Canal blockage, experts are concerned that this latest delay will have even more significant consequences.
China’s Yantian Port says it will be back to normal by late June, but it may be months before the cargo backlog clears and the global ripple effects subdue.
AP Moller MARSK is the world’s number one container carrier and says “the trend is concerning, and unceasing congestion is becoming a worrying problem.”
Ocean strategy company Flexport also shares these concerns, believing the congestion will take six to eight weeks to settle.
This is of particular concern because it extends disruptions into the peak Christmas and holiday seasons, as retailers and importers ramp up their shipments.
Maritime expert Alison Cusack says the knock-on effects from this delay are enormous and consumers will feel the pinch.
When will we see the shipping sector return to normal?
Well, don’t hold you breath. Cusack says at least 2022… “If we’re lucky”
What does increased cost of cargo mean for me?
Experts are warning that consumers may begin to feel the pinch from rising shipping costs, as the price of transporting goods by sea skyrockets.
Recetn figures show the transportation of a 40-foot steel container ship between Shanghai and Rotterdam now costs over $10,000, that’s a huge 547 percent increase on the average price.
Around 80 percent of the world’s goods are transported by ships, meaning the costs will be largely unavoidable for both consumers and businesses
Toy importer, Gary Grant says “during 40 years in toy retailing he has never known such challenging conditions from the point of view of pricing.”
It’s believed the rise in costs is associated with a number of factors, from soaring demand to a shortage of containers, busy ports and a limited workforce.
The disruption to the shipping industry could lead to shortages in the lead up to Christmas.
An outbreak of Covid-19 in a province in southern China is causing congestion at the region’s ports.
Shipments have now been delayed… adding to the tensions within global supply chains, the knock-on effects could take many months to resolve.
This is the latest in a series of severe setbacks for the industry and experts says that problems in just one region can have ripple effects around the world for several months.
The cost of cargo mishaps on the environment
Two weeks ago, a chemical-laden cargo ship sunk off the coast of Sri Lanka amid fears of a major environmental disaster.
Hundreds of tonnes of engine oil possibly leaked into the sea, with a devastating impact on marine life.
Sri Lankan and India worked together to put out the fire and prevent the ship from breaking up and sinking.
X-Press Shipping – the Singapore based company which owns the vessel – confirmed the crew had been aware of the leak, but say they were denied permission by both Qatar and India to leave the ship there before the fire broke out.
The fact that Sri Lanka allowed the vessel to enter the country’s waters after it was rejected by two other nations has led to widespread public anger.
A plane arrives in China. On board, one of the world’s richest men. He’s come to convince authorities that he should be allowed to set up a brand new factory.
He is Elon Musk.
And this is his first trip to China in three years.
Staff at warehousing giant Amazon have walked off the job to protest the company’s return-to-office program
Over 1,900 Amazon employees pledged to protest globally over proposed changes to the company’s climate policy, layoffs and a return-to-office mandate.
The activist group behind the rally is known as Amazon Employees for Climate Justice (AECJ), who are seeking a greater voice for employees.
“Our goal is to change Amazon’s cost/benefit analysis on making harmful, unilateral decisions that are having an outsized impact on people of color, women, LGBTQ people, people with disabilities, and other vulnerable people,” organisers said.
Over 100 people gathered at the heart of Amazon’s Seattle headquarters on Wednesday. The company said it had not witnessed any other demonstrations.
AECJ said the walkout comes after Amazon made moves “in the wrong direction”.
The company recently has recently overturned a desire to make all Amazon shipments net zero for carbon emissions by 2030.
The company maintains a pledge on climate change.
Amazon spokesperson Brad Glasser told Reuters the company is pursuing a strategy to cut carbon emissions.
“For companies like ours who consume a lot of power, and have very substantial transportation, packaging, and physical building assets, it’ll take time to accomplish.”
AECJ protesters also sought support for the 27,000 staff, who had lost their jobs in recent months —around 9 per cent of Amazon’s global workforce.
The company has also mandated a return-to-office program.
As employees recover from the height of the pandemic, the Great Resignation has come to light
The pandemic saw the term ‘the great resignation’ coined as thousands of people resigned from their jobs across the U.S. in 2021 and 2022.
Karin Reed, the author of ‘Suddenly Hybrid said the great resignation was a period of employees taking control of their future.
“A lot of people realised in their current environment they were not happy with what they were doing with their job. They chose to vote with their feet and go elsewhere,
In other parts of the world, a spike in resignations was not reported.
However, a higher degree of workers began reporting post-Covid burnout, as they made a return to the office.
“There’s been a blurring of the lines. You have work that’s not confined by a physical space.
“Instead of closing the computer and walk away, our computer is in the next room.”
