3 December, 2022

Freight transport worsens, warn of supply crises at the end of 2021

Cargo ship sails in front of tourist area in San Francisco, honey 39 and Alcatraz Island. photo VD: Alberto Barrera.

By Alberto Barrera

Pittsburg, California – When crossing the San Francisco Bay over the Golden Gate or Bay Bridge I have observed huge cargo ships parked in the beautiful inlet and I learned that it was due to a congestion in the port of Oakland and many in the world, which according to experts is a supply crisis, including terrestrial ones, which threatens to go global in December.

Production problems began last year after factory and border closures due to restrictive measures due to the COVID-19 pandemic. In December the alarm sounded as global cargo movement faced a shortage of containers, which was aggravated in March because a huge freighter was crossed in the Suez Canal

Suez blocking supplies from Asia to Europe via the Mediterranean for a week.

Cargo ships off San Francisco, Port of Oakland in the background waiting for downloads. photo VD: Alberto Barrera.

They crowded at least 437 freighters generating the crisis that affected the whole world, to some countries more and others less, But the future warning is that the most severe effects would be in poor countries and in economies that depend heavily on imports., especially to retail companies.

Carlos Barrera placeholder image, logistics advisor, told Voice of the Diaspora that because China has a 40 percent of world production exerts an important weight in global trade and that when facing problems due to the pandemic and then the crisis of lack of containers generates a chain effect.

Truck in unloading area. photo VD: Oscar Sandoval.

"When a link is missing in the supply chain, it becomes more difficult to meet the demands and since the COVID-19 pandemic came, the supply chain was lost", he said but clarified that in the closure China continued to produce, although it did not have enough containers "to meet the demands" when many countries reopened activities.

He also alluded to the case of land transport that faces problems due to delays in the departure of cargo at ports and prices..
"Difficult situation is seen and felt in cargo transportation", said Oscar Sandoval, a middle-aged Salvadoran who has been driving his huge trailer within the United States for six years, sometimes from coast to coast.

Cargo truck drivers break.
photo VD: Oscar Sandoval.

He added that "the hope is that when those ships fill the ports with merchandise there will be a lot of work and the prices will be very good", But it is just what worries Central American exporters who have been alerted to the high costs of maritime freight.

"The export sector is being affected by the global crisis that has caused an increase in transport prices" and thus the competitiveness "of low-value and high-volume goods., since in many cases the value of the freight is equal to the value of the product ", Fecaexca said in a statement that brings together exporter associations from the five Central American countries, Panama and Dominican.

Cargo ship passes area and intense mist under the Golden Gate Bridge. photo VD: Alberto Barrera.

The BBC in London alluded in an analysis to the excessive increase in freight prices and compared that “in September 2020 Moving a freight from China to the United States cost USD $4, 469. One year later it costs USD $20,615. In one year the price has more than quadrupled. "

Barrera cited the case of the port of Los Angeles where he said that there is an average of 75 freighters stopped, what Sandoval responded to him in a chat that we maintained that “yes, yesterday I loaded into Long Beach and was hit by boats ".

Land freight transport is also in crisis due to fuel prices, mainly in California, and besides there are not enough trucks. The prices of these vehicles have skyrocketed in the US market. “Here there has been a phenomenon that there are no trucks to buy and the few that there are, the prices went through the roof., and if you want a new one, they ask you for a year to deliver it ", He said.

From London the news chain "CNN Business" confirmed the current crisis around the world. “The cost of shipping is skyrocketing” and “that's worrying news for retailers and shoppers., especially for the Christmas season ", He said.

The problem is global and multi-factorial, and it is not known how long it will take to resolve., although all linked to the COVID-19 pandemic which is not known when it could be controlled.