A lack of sufficient road and rail infrastructure, and insufficient port capacity will place stress on the global economy, creating the “perfect storm” for shipping according to the Global Shippers’ Forum (GSF).
At the Eurocoke Summit in Amsterdam, Chris Welsh, secretary-general of the GSF, said: “Increasing international trade will set unprecedented challenges to the transport system, particularly around ports, in port hinterland distribution and in surface road and rail freight movements.”
Welsh added: “The West Coast of the US has given a glimpse of a nightmare situation. The ‘perfect storm’ of larger container ships, new maritime alliance configurations, vessel bunching, port congestion, labour disputes and a lack of inland haulage has placed unforeseen consequences on global supply chains and the US economy.”
He continued: “West Coast port congestion has specifically hit US retailers, suppliers, distributors and agriculture. Some US economic analysts have said that the situation has had a “drag” effect on US GDP, with 12.5% of US GDP flowing through the two main West Coast container ports, costing the US economy billions of dollars.”
The GSF head highlighted projections by the Organisation for Economic Co-operation and Development (OECD) that trade-related international freight will grow by a factor of 4.3 by 2050.
He further mentioned that future growth “will be driven by changes to production and sourcing and in the geographical composition of trade”, citing the dominance of Chinese ports, comprising seven of the world’s top ten biggest ports.
Welsh further called on the industry and regulators to work together to avoid any future congestion crises with better scenario planning, and ensuring sufficient supply chain contingency strategies are in place.
He also appealed to regulators to scrutinise the alliances between shipping lines more closely, with regards to their impact on international trade.
In conclusion, he stated: “With agricultural products rotting at the port, lost contracts and empty shelves, those engaged in the supply chain have a clear responsibility to prevent future breakdowns, and in undertaking some future proofing to finding solutions to further potential problems.”
Source: ContainerMag.com