Global supply chain disruptions could be easing according to recent data but one local freight forwarder is warning the storm might not be over yet.
According to the Global Supply Chain Pressure Index (GSCPI), published by the US Federal Reserve, global supply chain pressures decreased again in March, falling below the index’s historical average.
It says there were significant downward contributions across many factors, with the largest negative contributions from European area delivery times, European area backlogs, and Taiwanese purchases.
“The GSCPI’s recent movements suggest that global supply chain conditions have largely normalised after experiencing temporary setbacks around the turn of the year,” it says.
However, New Zealand-based Go Logistics says it believes shipping data is only part of the story and masks an unresolved issue around labour pains both internationally and locally.
“Certainly, waning in global demand has helped to reduce the volume of cargo going through the sea freight supply chain and this has seen many of the issues of 2021/2022 dissipate,” it says.
The company reports many clients are seeing a drop off in their own ordering as demand and high inventories need to be dealt with.
But problems still exist in the area of labour including industrial relations throughout the supply chain and the continuing shortage or turnover of staff, it says.
The company points to strikes and industrial action at ports in France, Germany, Finland, the United Kingdom and Israel as recent examples.
“In all cases there was some shipping disruption resulting in delays to our clients and in the case of Hamburg a significant number of containers were left behind.
“The reasons for the strikes are varied depending on the location but the one common theme is wage increases,” it says.
There is also a “looming threat of significant disruption” at the ports of Long Beach and Los Angeles just as the US shipping scene is getting back on its feet.
“We have seen the return of regular scheduled services to New Zealand from the West Coast (easing pressure on East Coast options) but it would be those same export focused services that would be most affected if the longshoremen – some 22,000 – decide to strike.
“That decision would also have the flow on effects we have seen previously throughout the USA. There is a feeling that there is a finite “window” to resolve these issues before demand picks up again and things grind to a halt,” Go Logistics adds.
The labour impacts are also being felt in the airfreight markets from pilots, engineering staff to shift workers at cargo terminal operators.
“In Auckland, Menzies Aviation have been affected recently and hence the airlines they service.
“They admit that their cargo recovery and release times are not at the desired standard. This has led to delays in collecting cargo of several days which is unusual in the airfreight market and not welcome.
“Likewise finding trained warehouse staff and truck drivers remains a challenge throughout New Zealand especially as other economies look to attract talent from that same labour pool. These issues are unlikely to have a quick solution in 2023,” the company adds.
