A global survey published by Container xChange in December showed that the majority of the container logistics industry (75%) is rethinking its logistics strategy for 2022.
The survey results indicated that the industry is expecting gloomy times ahead. The top challenges for the industry remained finding slots on vessels and surcharges by carriers. Meanwhile, container lines have emerged as the big winners of 2021.
The xChange Industry Speak Survey 2021-22 was released to 800 container logistics players globally including shipping lines, container traders, freight forwarding companies, NVOCCs, shippers and procurement companies. The objective of the survey was to study the industry sentiment, key learnings from the year 2021 and outlook for the year 2022.
Key findings from the xChange Industry Speak Survey 2021-22
The industry is downbeat about the supply chain performance in 2022. Out of the total respondents, 65% said that the performance will either deteriorate further (11%) or seem to remain the same (54%) in the year 2022.
The top challenge was finding slots on vessels (53%), followed by surcharges by the carriers (22%) and labour shortage (19%).
Overall, 71% of respondents said they were rethinking their logistics strategies.
The main causes of container shortage this year, according to the respondents, were: shippers using boxes as storage (42%), container line failures (28%), inefficiencies in matching box owners to potential users (28%), and longer transit times and port congestions that made container rotation slower.
When asked ‘Who emerged as the biggest winner of the global supply chain crisis?’, the industry unanimously echoed the opinion that container lines (64%) benefitted the most out of the disruptions.
75% of respondents said that COVID-19 impacted their business. Out of these 75% respondents, 54% said the pandemic resulted in lower profit margins, 36% said it resulted into less transparency and 36% said they resorted to more digital solutions during these tough times.
Just when the year 2021 saw a slight recovery from the pandemic, the new variant made a dramatic entry and shook the industry once again. Foreseeing the market in 2022, and what it holds for the logistics business, Christian Roeloffs, Co-founder and CEO, Container xChange, said: “We foresee that COVID-19 and its new variants will continue to disrupt the port operations and labour capacity as we progress into the year 2022. Persistent unpredictability is warranted. We’ve also started to observe container prices and leasing rates going down. Once prices slide significantly, they risk crashing. If we look at the current demand, we see that the demand for containers hasn’t increased significantly.”
He added: “The current spike in rates is caused by a temporary supply crunch. But with disruptions such as labour union conflicts at US ports easing up, we’ll also see the capacity challenge improving. However, the ‘return to normal’ seems to be coming earlier than many of us first anticipated – and it might be as early as the second half of 2022.”
Sharing his expectations from the year 2022, Johannes Schlingmeier, Co-founder and CEO, Container xChange said, “2021 was an outstanding year for the shipping industry. The staggering earnings and profits for ocean freight companies have surpassed the combined industry profits made over the whole decade. It was also a year that showed that shippers were ‘willing’ to pay higher prices for shipping.”
He added: “Now, those earnings and profits will need to prove that this money can be put to good use to improve service levels across the industry. This has to go beyond the traditional levers of investing in more container capacity – but also into landside infrastructure, inland transportation and infrastructure for cross-industry collaboration to build resilience for the industry.”
Photo: Christian Roeloffs (left) and Johannes Schlingmeier.