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The global supply chain will not recover until 2023

That the Covid-19 pandemic is not over yet is a reality. In fact, beyond its tragic health consequences, the economy is still contained in many aspects. The global supply chain is not advancing and the component crisis is not abating.

Chinese ports are still stuck Despite the small relief in recent weeks, and the shortage of products of all kinds, including technology and household appliances, it is already a reality in the vast majority of countries.

The international logistics company DHL is clear: it will not be until well into 2023 when international trade recovers the normal rhythm it had in 2019, the months before the pandemic that paralyzed the world. According to DHL, ‘port congestion’ will ease from next year as containers are delivered and emptied and shipper demand eases.

β€œIt will decrease in 2023, but it will not return to 2019”, Tim Scharwath, CEO of DHL Global Forwarding said, adding, β€œI don’t think we’re going to go back to this overcapacity situation where rates were very low. Infrastructure, especially in the United States, is not going to improve overnight, because infrastructure developments take a long time.”

Although now it does seem that the pandemic offers symptoms of exhaustion, at least in its most serious effects on health, the 2021 coronavirus outbreaks and the consequent restrictions led many companies to have a drastic decrease in the number of workers.

An indispensable brute force for the supply chain to run smoothly and the business logistics of corporations are not slowed down or even stopped at times. There have also been cases this 2022 with cases like Shenzen that had to stop the production of chips and components due to a new confinement

This also led to containers suffered record price levels in their rates. For example, a cargo container from China to Los Angeles cost more than 12,000 dollars, 800% more than in pre-Covid times. Although the situation, as we say, has eased minimally, the non-normality of the key port of Shanghai continues to delay the loading and unloading of products. The reopening of this Chinese financial and manufacturing center is expected, according to DHL, as more products are shipped from Asia to the United States and Europe before the year-end holidays.

According to forecasts, US ports must prepare for a surge in imports in the coming months, expecting shipments to remain close to March’s record of 2.34 million 20-foot containers, according to the National Retail Federation. In addition, they must look at what is happening in Europe, where important Commercial ports such as Hamburg (Germany) and Rotterdam (The Netherlands) are starting to get congested as more and more cargo arrives from Asia after the minimum opening of its ports, which could worsen if the Asian ports quickly recover normality in the coming months.

“Any stressful situation, no matter where in the world, will influence other parts of the supply chain,” said Tim Scharwath. At the end of 2021, container ship orders were 9.8% of the existing fleet in the world, about 6.5 points more than the previous year.

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