Jaguar Freight | Global Freight Updates: Still Watching China

In this week’s Roar we’re covering several angles of the supply chain mess that is China, air cargo as the hero we didn’t know we needed, and the internet of things (IOT) technology as one long-term solution.

As supply chain professionals, we are acutely aware of how the present lockdowns in China (which impact regions producing 40% of GDP) will have far-reaching implications on an already tenuous global economy. With the situation in Ukraine not helping matters, it’s discouraging that the “US Supply Chain Stress Tracker” (see the chart), is peaking again. And, some are predicting it’s only going to go up from here.

And unfortunately, things don’t seem to be getting better. COVID-19 cases continue to rise in Shanghai, especially at the Port of Ningbo. Lars Jensen, CEO of Vespucci Maritime, speculates that things won’t improve anytime soon for either production or logistics out of Shanghai and warns shippers to be prepared for drops in export demand and an increase in blank sailings.

Europe is also facing something of a perfect storm with the COVID situation in China, Russia’s invasion of Ukraine, and rising inflation all threatening their economies. Congestion at northern European ports, railroads, and trucking junctions continues to worsen, leading to major container shippers either delaying or canceling sailings entirely. All of this is adding strain to logistics networks already under great stress.

Over the past two years, supply chain disruptions have forced supply chains to find alternate options to move goods and many turned to air cargo. Yes, it’s more expensive, but also more reliable and much faster. So if you prefer faster to cheaper, you’re happy. Many of us, not so much. Air cargo surged during the pandemic thanks to skyrocketing online shopping coupled with congestion and disruptions in more traditional modes. As these methods became more expensive and less reliable, air cargo became a smart choice. Ultimately, there have been no win-win solutions with price increases inevitable for all of us.

And finally, the infrastructure of the supply chain is getting a 21^st-century makeover with the use of IoT technology. It may have taken the pandemic as a push for many in the industry to really embrace this type of digital technology, but it’s coming faster these days. The future of the industry is smarter—with IoT devices, artificial intelligence, machine learning, wireless sensors, 5G, and big data all playing a part.

Compliments of Jaguar Freight – a member of the EACCNY.