The six trillion euro global shipping logistics market works is a machine where each part of the supply chain used to manage global trade from sourcing destinations to end customer regions works in a carefully calibrated manner. The Covid-19 pandemic has been a shock to the global economy. While most of the attention has been rightly focused on the human and economic costs of the pandemic, with vaccines being approved, the focus has now shifted to enabling normalcy across human connections and business activity. This will be harder than otherwise possible because without global trade normalization, the economic growth of nations will be constrained, and global trade has a huge container crisis. The United States after settling into lockdown mode went through a huge import binge pulling an unnatural number of containers to its ports. This situation is exacerbated because Covid guidelines mean the processing and throughput at ports and terminals have slowed.
At the same time, China’s economy has come roaring back from its self-imposed pandemic exile. In November 2020 alone exports were 20%+ year on year. With containers stuck in the United States, massive demand in China for any free container, at all ends of the supply chain inordinate waiting times are becoming a norm. For an industry like supply chain which has for decades been introducing demand-driven efficiencies, this container crisis is affecting both planning and costs and forcing greater reactivity from suppliers and retailers. At Sourcespot we have been managing the fallout from this crisis for months, for our customers helping them adapt to the unpredictability while ensuring strategic objectives are met. A few clear lessons stand out.