The past two years have been a period unlike any other for supply chains, with disruptions forcing constant change in the way goods are moved domestically and internationally.According to Peter Sand, chief analyst at Xeneta, while the signs of recovery are there, the industry is not out of the woods yet.“The market remains full of uncertainty,” he said during a recent online conference. “This time of the year used to be the peak season, but that is no longer the case. It is also traditionally tendering season, but nowadays we are seeing tendering take place all year round. We continue to be on this fast ride of change, with uncertainty the order of the day.”Sand said Covid-19 continued to impact daily, especially with measures and lockdowns still in place – predominantly in the Far East. “We have seen that congestion has reduced somewhat in the past few weeks in the East, but there are still issues getting into and out of some ports due to Covid measures. Several places are still in lockdown and this also affects the ability to move goods from one place to the other.”Congestion in other parts of the world also continued to hamper trade, resulting in shippers having to find new solutions. At the same time, operational costs have increased sharply thanks to rising inf lation and the high cost of fuel. Freight rates continue to be abnormally high, despite indications of decreases on the horizon.Sand said now more than ever shippers needed to monitor their supply chains to ensure f luidity and to ensure that they weren’t caught off-guard.“Nothing could be worse than being caught simply because you did not know,” he said.Using the usual peak season as an example, he said demand over the next two quarters was likely to be very different from the usual patterns at this time of the year. “Traditionally the peak season has delivered high volume, but this year we are not seeing this trend. It is not carved in stone as yet, but all indications are that volumes moved in the second half of this year will be significantly lower than those moved in the first half of the year.”While this would still require some weakness in the market, global volumes were currently declining at 1.8%. “If the volumes in the second half of 2022 fall below the volumes of the first half of the year, then we would see a total decline of 2.7% on a global scale. It is still early days but we are seeing enough headwinds from global economics, inf lation and geopolitics to make this prediction.”His advice to shippers was clear. “Stay on top of your market and your supply chain. You need insight into demand. Watch developments, not only in your region but around the world, carefully.”According to Sand, the market is expected to remain uncertain for the foreseeable future, with ongoing economic pressures easily stalling any significant growth forecast.
