Even with all available shipping vessels deployed, some old vessels re-commissioned and new ones in production, the worldwide logistics challenges will not easily be fixed. This was revealed by the World Shipping Council to a recent working group meeting of the Global Coalition on Fresh Produce.
The Southern Hemisphere Association of Fresh Fruit Exporters (SHAFFE) reported the outcomes of the meeting back to local organisations such as Hortgro.
South Africa’s deciduous fruit industry has been particularly hard hit by disrupted international shipping patterns this year and Hortgro reported bitterly disappointing income from a promising stone fruit harvest, mostly due to fruit being delayed on their way to European consumers.
According to the shipping council’s presentation, global supply chains are still caught in a “perfect storm”.
A sharp drop in demand in the first half of 2020 was followed by “an extreme, sustained demand peak” ever since.
Ports are generally congested due to the increased traffic and cargo, combined with staff shortages and inadequate inland capacity to store and transport goods out of the ports.
Many empty containers are also stuck in congested ports or tied up with wholesalers and retailers who are overwhelmed by the unprecedented demand for goods.
And to add to the challenges, a trade imbalance is exacerbated by a notable increase in demand for recreational and electronic goods from Asia to the United States and Europe. This causes a build-up of empty containers “in the wrong place”.
‘Doing everything to meet demand’
The shipping council reported that all available vessels are currently in use and that even old vessels have been redeployed. Shipping containers are also used to capacity.
Although more vessels and containers are in production, it will take “a few years” to put all the new ships to work and “time” to get enough new containers into circulation. A 4% increase in vessel capacity is expected next year.
SHAFFE said coalition members were told by the shipping council that there are no easy fixes for the current situation and that it will depend on stakeholders in the entire supply chain. It expects shipping patterns to normalise once consumer demand returns to normal and capacity increases.
The council could not predict timelines.
No considerations for perishable products have been taken so far and the council advised the produce industry to speak directly to its own service providers to overcome issues as disruptions are likely to continue.
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