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Some Factors Affecting The Global Supply Chain and Freight Market

The continued pandemic, rising fuel prices, inflation, and Russia's invasion of Ukraine are all wreaking havoc on the economy, causing freight markets and global supply chains to swell. Key elements of their insightful conversation reveal positive aspects and new opportunities for shippers, merchandise brokers and carriers.

Demand for capacity exceeds supply

Anyone involved in the supply chain, transportation, or logistics should not be surprised by this. The issue has been ongoing for the past two years. Carriers and freight brokers have been investing in technology to increase efficiency, but this can only go so far.

As shippers look for breakthroughs or benefits, intermediaries that lack advanced technology could be squeezed out as those with better technology and greater reach take control.

Labor struggles and equipment shortages persist

Both challenges are universal, but the hardest-hit modes are marine, trucking, and rail. Statistics point out that 10% of the capacity of the container ships is not being used right now; they're waiting in the ocean to get into the ports because of the bottlenecks on the shoreside. It is simply impossible to transport goods from a ship to shore by truck to their final destination. Docks are facing labour challenges and will again be impacted by collective bargaining this summer. Warehouses are understaffed. Carriers do not have enough drivers, and so on.

High inflation and energy prices have a bearing on food demand.

Inflation is at an all-time high and oil prices have soared, especially since Russia's invasion of Ukraine. Shippers and carriers are required to account for rising costs in all modes of transportation, which ultimately increases the prices of all goods purchased by consumers. Consumers will reduce their budget for non-essential goods, but it could be positive. Capacity could be re-established in some freight transportation sectors and help unclog ports, which will help retailers fill inventory and work towards the recovery of the supply chain.

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