What does 2022 have in store for container logistics players?

16 Dec, 2021

According to a global survey report, the year 2022 is not anticipated to be bringing a breath of fresh air for container logistics players. Almost 75% of players are looking at revisiting their logistics strategy in the coming year. The list includes the top 10 logistics companies in India too. Container xChange’s survey report highlights the current sentiment of the global container logistics industry. The industry is predicting another gloomy year and challenges on their way in 2022. Among all the challenges this year, finding space on the vessel and various surcharges levied by carriers were the top ones.

Let’s delve deeper into the key findings from the survey to understand the outlook for the year 2022:

  1. The industry is holding a downbeat sentiment towards the performance of the supply chain in 2022. Out of the total respondents, 65% feel that the performance would either deteriorate or remain the same.
  2. 53% highlighted finding slots on the vessel as the topmost challenge, followed by surcharges levied by the carriers as mentioned by 22%, and labor crisis as mentioned by 19%. 6% of the remaining respondents emphasized the challenge of lack of transparency and visibility in the supply chain.
  3. 71% of the respondents mentioned rethinking their strategy. They are looking to diversify sourcing and hold more inventories. The majority mentioned that they would opt for diverse sourcing, some said that they would go for holding more inventories, and the remaining said that they are looking at entering into long-term contracts with carriers by avoiding the spot market and shorter supply chains.
  4. Instead of getting equipment from carriers, 50% of respondents said that they would resort to one-way leasing, followed by long-term leasing contracts by 28% of respondents, and buying containers by 22%.

Just when the container logistics industry showed the slightest signs of recovery, the Omicron variant made a dramatic entry and worsened the international sea freight cargo services scenario. It is being foreseen by the leaders of container logistics players that new variants are going to continuously disrupt the port operations and labor capacity as we make way into 2022. Uncertainty and unpredictability are going to be persistent throughout. On the brighter side, they are hopeful that the staggering earnings made by container logistics players in the year 2021 would be put to good use, e.g. improving service levels across their networks. They have also mentioned the industry’s awareness of shippers willing to pay higher prices for shipping. It is therefore believed that prices won’t be a constraint in the year 2022.

With container prices and leasing rates starting to go down, the current rate spike could be the consequence of a temporary supply crunch. It is expected that with the easing up of labor union conflicts at the US ports, the capacity challenge would be improving worldwide. It is also predicted that the return to normal could be experienced in the second half of 2022 by the world’s container logistics players.

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