Global pandemic-induced supply chain woes are set to continue for much of the year, including elevated demand, staffing shortages and global port congestion, says South African Association of Freight Forwarders (SAAFF) CEO Dr Juanita Maree.
Indeed, moderation, or a return to normal – albeit a new, adjusted normal – will only occur around the Chinese New Year in 2023 (late January).
The supply chain constraints, which started on the back of soaring demand for consumer goods in developing countries, have resulted in stratospheric container freight rates, which all role-players in the extended supply chain have unfortunately had to grow accustomed to, notes Maree.
However, despite the accusations of carrier alliances potentially engaging in illegal behaviour – such as artificially limiting supply or not competing on prices – they have held firm in attributing the problems to pandemic-related origins.
Chinese ports have experienced the brunt of China’s zero-Covid policy, she adds.
Unfortunately, being the major trade partner to many countries worldwide, stoppages in China have a ripple effect throughout the rest of the world. Regardless of who is to blame, shippers and traders alike are anguishing over the situation, says Maree.
Smaller importers and exporters have seen their cargo getting rolled — bumped like passengers from an oversold flight — and sometimes cancelled outright, despite contractual obligations with carriers.
“In South Africa, we are not spared from these global issues,” says Maree.
South Africa Inc will have to adapt to a new normal as the Covid-19 pandemic has “completely reshuffled” global and local supply chains, notes Maree. This new normal may include a persistent shortage on some products, as well higher prices.
“Many businesses are still recovering from the long-standing effects of the pandemic,” she says.
“Therefore, some commodity shortages are to be expected with accompanying high prices. Indeed, a significant amount of supply chain narrowing has occurred, resulting in the unavailability of several product lines.
“In addition, adjustments to remote working conditions and processes, and technological adaptation are also expected.”
Maree also predicts further growth in e-commerce as more companies recognise the benefits of online marketing and accompanying business services.
“This evolution will, in turn, ignite the demand for third-party logistics services.
“As a result, last-mile delivery services will be integrated more and more within business processes, adding to trade complexities.”
Maree also hopes that 2022 will see a greater uptake of emerging technologies within the supply chain, driven by Big Data.
“Emerging technologies are expected to revolutionise trading and validation processes with real-time data, simulations and automation.”
On a positive note, obstacles and constraints require innovation and solutions, and South Africa has the capacity to deliver all of these, says Maree.