Its about to get really really expensive...
Good Day to All,
Thank you for following along the blog and newsletter.
This month has flown by and its time for another recap.
I was not the only one that has been hating filling up the car at the pump. When we saw fuel prices spike earlier this month, it was a major indicator of change within Global Supply Chain.
Its the start to further increases in freight pricing, product pricing, increases in transport pricing, essentially as the title states, its about to get really really expensive.
This article published by the BBC UK team is a great summary of why the pricing is fluctuating.
The volatility in the fuel pricing essentially comes down to the uncertainty in global supply of crude oil.
How does this effects us in supply chain, well, it takes a lot of fuel not only to produce product, but also fuel the vehicles transporting our goods, be it a ship, truck or plane. Its very difficult to safeguard your supply chain from these unstable fluctuations in costings as there is no trend, no pattern, quiet frankly its the wild wild west.
COVID put tremendous strain on global supply chain markets and just as we saw the tiniest trend of stability, it feels like another punch. We saw just last week further COVID related port closures in Shenzhen/Yantian.
These are unprecedented times and this year will continue to be very hard for Australian Importers. Lets take a look at supply chain pressure over the past 28 months. As you can see, there was a significant easing of pressure on the market from December 2021 through to February 2022. We can expect this pressure to now increase and it is forecasted to overtake the pressure point of December 2021.
Sources: Bureau of Labor Statistics; Harper Petersen Holding GmbH; Baltic Exchange; IHS Markit; Institute for Supply Management; Haver Analytics; Bloomberg L.P.; authors’ calculations.
Note: Each index is scaled by its standard deviation.
In support of the above, lets take a look at the latest published data from the Seaexplorers Global Disruption Indicator. The GDI, “…which tallies the cumulative teu waiting time in days based on container vessel capacity in disrupted hot spots. The teu waiting days (TWD) indicator works whereby, for example, one vessel with a 10,000 teu capacity waiting 12 days equals 120,000 teu waiting days. Looking at just Hong Kong and Shenzhen, where COVID cases have hampered port productivity dramatically this month, the TWD at these two neighbouring boxports stands at 1.5m days as of yesterday, versus around 500,000 days two months ago…”.
Source: https://splash247.com/european-and-american-terminals-brace-for-whiplash-effect-from-latest-china-covid-outages/
What is the take away you ask? Essentially 2022 is not the year we will see pricing drop and we are going to see extensive delays out of China. The issues of securing a booking will continue to play havoc and we will see rolling's, vessel cancellations, extensive delays and detention charges occurring.
OSCL Internal News:
We are prepping for our MS 50Kms in May.
Please head on over to our support page and donate to support a fantastic cause.
Thank you to everyone that support me through February while I was recovering from surgery.
I had some lovely messages of support and it was greatly appreciated.
We have a lovely wholesale shipping provider that has agreed to come on board and provide our clients with wholesale shipping rates out of China. If you are interested in comparing the freight rates you are currently achieving, please do drop us a line to see if we can assist with cost savings in this difficult market.
Highlight News Articles:
COVID Chinese Congestion:
Chinese Port Congestion:
Russian Sanctions:
FTA - Across Borders Magazine:
ABF Newsroom - Asbestos Highlight:
Once again thank you for the continued support.
2022 is another tough year and we love being able to help our clients in anyway we can.
Please don't hesitate to contact one of our team, to assist with your logistics and customs requirements.
