2022 has been a very special and different year in many ways and in this press release Anna Smirnova, Head of AIPL AsstrA UK summarizes the year in the field of logistics.
An attempt to summarize the observed phenomenon of the past year eludes the standard approach. As 2022 begun, COVID-19 and its economic and societal consequences continued to pose a critical threat to the world. If that wasn't enough, World geopolitical situation changed in February and sanctions on a major oil and gas exporter sent fuel prices even higher… and it was only February. But let’s review one step at a time.
In retrospect, one can say that January was very calm. Everyone was ready to face the consequences of the post-pandemic reality. 2022 started in an environment we remember well. COVID-19 and the closure of numerous ports and factories, resulting in a slowdown in the flow of goods around the World and increased consumer demand. Delays and rising costs became no surprise to anyone. Seriousness of the situation was becoming apparent following the long queues on Belarusian border. Over 40 hours in Koroszczyna and up to 65 hours in Bobrowniki - that's how long the truck drivers had to wait to enter the area of Belarus’ eastern neighbor.
24 February 2022. If the Pandemic crippled the global supply chain, the military actions in Ukraine knocked it to its knees. Beyond uncertainty, it created barriers in the market, disrupting the movement of commodities such as like auto parts, oil and grain.
The supply chain is in chaos — and situation is getting worse. Air freight warehouses at Shanghai Pudong Airport are log-jammed as a result of strict Covid-19 testing protocols imposed on China’s biggest city following a local outbreak. At the city’s port, Shanghai-Ningbo, more than 120 container vessels are stuck on hold. In Shenzhen, a major manufacturing hub in the country’s south, trucking costs have shot up 300 percent due to a backlog of orders and a shortage of drivers following the introduction of similar Covid-19 restrictions. Major ports all over the World, which used to operate like clockwork, are now beset by delays, with container ships queuing for days in some of the worst congestion ever recorded. The list goes on.
Flight Routes Are Being Thrown Into Chaos With Closure of Russian Airspace. The EU has imposed unprecedented sanctions against Russia and vice versa.
Sky-high refining margins for diesel and gasoline in Europe and the United States, driven by a cutoff in Russian supply, has sent prices for some types of physical crude oil to all-time records.
We keep calm and carry on - it’s only hallway through the year.
In June Northwest European ports such as Rotterdam, Bremerhaven, Hamburg, and Antwerp were witnessing unprecedented yard density and port congestion levels. Further, global vessel schedules continue to be disrupted, causing vessels to arrive at the ports outside official schedules and thus making berthing plans challenging to manage.
Logistics headaches to intensify as water levels along crucial shipping artery the River Rhine continue to fall amid hot, dry weather in northwestern Europe.
Port strikes in the UK. Some 2,000 staff at the Felixstowe Port, Britain's biggest container port, walked out for an 8-day strike, as they demanded better pay in the face of Britain's soaring cost-of-living crisis. Electricity prices increased by 64.2% in the UK.
Skyrocketing inflation. For the world of logistics this means that warehouses are filling up with stock that businesses are unable to sell and subsequently replace with new produce. This in turn results in containers imbalance at ports and terminals across Europe, resulting in high detention and demurrage costs and slowed down operations at the same time.
Europe’s largest onshore intermodal logistics terminal opened in Fényeslitke. Europe’s largest and most modern green concept land-based intermodal terminal has been built in record time, with a private investment of more than HUF 40 billion, in Fényeslitke, in the immediate vicinity of the Hungarian-Ukrainian border.
Manufacturing disruption in the UK: Forward delivery electricity prices in the UK are up over 500% Y-o-Y, with prices increasing 64.2% in August alone. The UK heads into winter in the most uncertain energy supply predicament in Europe. While the effects of this are uncertain, it is possible there will be interruptions to manufacturing in the UK over the winter, reducing road freight volumes.
We’ve reached December with its joyful Festivities laced with snowfalls, subzero temperatures and multiple industrial actions.
This year has given us most difficult trials but also confirmed our belief that there is always a positive solution to be found. No matter how difficult it may seem. Thank you to the entire AsstrA team for support during these 12 months and I look forward to many more.
Author: Aneta Kowalczyk.