Ocean shippers are still battling port congestion, container shortages and high rates without relief in sight. On this episode of Freightonomics during FreightWaves’ Global Supply Chain Week,Zach StricklandandAnthony Smithtalk to Colorado State Assistant Professor Zac Rogers about the woes plaguing maritime shipping.
Rogers cited the latest edition of the Logistics Managers Index in his analysis of the current state of the maritime market. He said all three price metrics in the supply chain are sitting at 28-month highs and have grown consistently through the pandemic.
The lack of shipping capacity is one of the biggest drivers of that growth, and the need for reliable carriers to move that freight leads carriers to charge high rates. Rogers said he doesn’t know what the solution is to these problems and even port expansion will not be enough to resolve them.
Rogers said consumer buying behavior has led to inventory shortages, which only exacerbate the problems as companies scramble to replenish warehouses. “E-commerce was forecast to go up by 15% last year; instead it went up by 45%,” said Rogers, adding that this is a hole he doesn’t see us digging out of soon.
“Even though we are going to be adding capacity, prices will stay high and keep getting higher at least through the end of 2021,” he said.