Banking News

True Cost of Supply Chain Disruptions Yet to Materialise

True Cost of Supply Chain Disruptions Yet to Materialise

(2 August 2021 – Global) The staggering volume of delayed merchandise trade across the globe could thrust markets into an “inventory recession” where demand for goods declines as amassed goods stockpiles are finally distributed.

Market forecasters believe stevedoring gridlocks, requisitioned transport, border closures, COVID restrictions and on-premise staff impacts will not be rectified until at least Q1 2022. Hamburg ship broker Harper Petersen & Co reports that its “HARPEX” container ship index of global price development on the charter market for container ships has jumped from 1154 in Q1 2021 to 3301 as of Q3 2021.

The spot rental for containers from China to the US west coast has surged from an already elevated US$4,000 at the end of 2020 to US$10,000 in recent weeks alone. Amid the upcoming supply chain flush out, key stakeholders will capture more information about what goods will arrive where and when, helping to cushion the blow from future inventory recessions.

“Under normal circumstances, a container will go from the factory in Shanghai to Chicago in 35 days. Now it takes up to 73 days, and then the same container has to be returned, usually empty” commented Vespucci Maritime CEO, Lars Jensen.

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