The world finds itself in a container crisis. Ports are overloaded, ships are stuck and world trade hangs in the balance. CEO of ICT A/S, a Danish logistics company working in the CIS region, sees no positive changes on the way in the coming time.
With the rapid rise in demand for shipping, the world has found itself in a shortage of containers. According to CEO of ICT A/S, Leif Pedersen, there is no reason to believe things will change for the better in the near future.
“There has not been a single thing, that has become easier over the past year. There are some smart people who says that it will be better in 2022, but I say “forget it.” The only thing that can solve this is if the international trade will dwindle, but GDP is showing the complete opposite is happening. It is a critical situation,” says Pedersen.
“The situation right now is, that 14 days ago, 370 something ships were laying outside ports all over the world not able to get into the ports, because they are overbooked. Right now, some ports are at 95 percent of capacity, making it a problem to get goods in and out of the ports,” says Pedersen.
A lot of the crisis is currently centred around especially Asia, but according to Leif Pedersen, international trade is international, and therefore problems in the supply chains in China will also affect the markets everywhere else no matter if you are in Ukraine, Utah or Uganda. The container shortage started in the middle of last year, as the COVID19 pandemic boosted ecommerce. But containers are not the only thing, that the world needs to let logistics and distribution run more smoothly.
Drivers and trucks
Another thing missing are the drivers that haul containers across continents. In Europe alone, Pedersen says, 400,000 drivers are needed. In addition to that, delivery times on something as simple as a trailer is over 10 months. Even if you get the trailer, there is also a shortage of trucks that is amplified by the current problem with deliveries of the electronic chips, that Ukraine Nu has also previously written about.
“If I was offered them, I would take all the drivers, I could get. Not that I have the trucks for them, but I would get them out driving right away. When we need 400,000 drivers, even if it would just be 250,000 drivers, in Europe, it is still a lot. Where should we get these drivers from? I will guarantee you, that at the end of the year, more people will have retired than people who have become truck drivers,” Pedersen says.
Naturally, the increasing demand for truck drivers has also made salaries rise. According to Pedersen, some places salaries has risen with up to 30 percent. And while he believes that is not an issue, that drivers get paid more, he does not believe it will attract more people to the business of hauling cargo across the European continent.
“It moves the drivers around from company to company, and I might be able to solve my problem right now, by offering drivers more pay, but that only lasts until another company steals my drivers. It does not help, that we are stealing from each other and it is an enormous challenge. It is also not a job with a lot of status connected to it, so that is why you cannot say, that an increase in wages will automatically result in more drivers,” says Pedersen.
Rising prices
The wages for truck drivers is not the only thing rising. Also the prises on transportation of goods is likely to start increasing, according to Pedersen.
“Pressuring the prices on transportation will stop in time. If you do not want to pay the price of transportation, it is not hard to find another costumer. The entire branch of distribution and logistics is a sector, that earns to little. Some might make too much money, but that will be adjusted over time. But that does not mean, that the prices are not gonna rise. There just are not drivers enough, and it does not help that I sign a contract of delivery, if I can not move the goods,” says Pedersen.
In conclusion, Pedersen outlines a lot of problems. Shortage of containers, equipment and container capacity in the ports is one thing. He also mentions shortage of container ships, and though new ships has been ordered, they are not due to be delivered before 2023. Then there is the shortage of drivers. And in his opinion, these problems will follow us for the rest of this and the next year.
“Will it be better in time? Yes. But when is it going to happen? That is the good question. I do not see it happening in 2021 or 2022.”
