Small Improvement in Supply Chain

By Jacob Wright

Supply chain has been the focus of many businesses in the last couple of years, with recent quarterly reports and earnings calls addressing logistical woes and strategies to adapt to the situation. While the current state of affairs is far from being stable, there is reason to be cautiously optimistic. The latest market update published by Maersk, one of the world’s largest global container shippers, details changes observed in the global supply chain. Much of it is shrouded in uncertainty, as the full extent of the geopolitical fallout due to the Russian-Ukraine conflict is yet to be seen. However, they pointed to a few improvements in supply chain operations, something that would’ve been considered wishful thinking in months past.

A key point of interest is the gradual improvement of the Asia Pacific to North America route. Waiting time at major ports like Long Beach and Los Angeles has decreased slightly to 15 days, with export volume expected to increase in coming months. Vancouver also saw a reduction in wait time, but yard density is still severe. However, other ports continue to worsen, and demand remains stable at a very high level.

On Asia Pacific exports, Shanghai is beginning to return to normal after a lockdown in April and May caused by a COVID-19 outbreak. Factories are starting to get back in full swing and demand has returned. Many other operations in China, like city area and interstate trucking, has returned to pre-lockdown levels.

Europe is facing more challenges than before, mainly because they are impacted to a greater extent by the war than North America. Additionally, Germany is experiencing labor strikes at key ports, furthering congestion, backlog, and uncertainty.

Much remains to be seen as to how the supply chain will look at the end of the year, but we are finally starting to see the adaptations and adjustments pay off to an extent. A link to the Maersk report can be found in the original publication of this issue. ■