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Por: SILVERSEA containers August 11, 2021

The difficulty and high cost of structuring the logistics chain in response to the international trade crisis.

As we discussed in the previous article (International trade and the shortage of sea containers), the pandemic has had a major impact on international trade and, especially, on the logistics chain. But what is the real percentage of the price increase of sea containers? Read on. More than 80% [...]

As we discussed in the previous article International trade and the shortage of sea containers )The pandemic has greatly affected international trade and, especially, the logistics chain.

But really, what is the real percentage of the increase in sea container prices?

Read more.

More than 80% of world trade is heavily dependent on container transport. The coronavirus brought a severe downturn in international trade which triggered a chain reaction with a contraction in the
movement of sea containers.

And that is why the price of containers has risen, up to 685% more than when we were not in this situation.

On the other hand, we saw a collapse in orders. To understand this better, a few years ago, when e-commerce started to gain momentum and we saw new campaigns such as "Black Friday", the logistics networks collapsed because, for efficiency reasons, orders did not cope well with high demand.

In the middle of the year, just as things were starting to improve, the whole logistical chain was set in motion again and this caused a pent-up demand that again collapsed China's logistical chain.

THE DIFFICULTY OF BEING ABLE TO ADAPT

The difficulty and high cost of structuring the logistics chain accordingly made it difficult to adapt.

Getulio Centanaro, product management for Mexico and Central America at AP Moller-Maersk, already commented that adapting to these high peak demands was complicated when there are such exaggerated and marked fluctuations as we have seen. Ultimately, you can't build more ships out of nothing, just as you can't expand the rest of the chain so easily. You can't immediately build warehouses, you cannot immediately put thousands of trucks on the road overnight.

And even if these options had a chance, the implementation of thousands of sea containers is not feasible because the demand does not double in a sustainable way and this means investments in the millions
that cannot be afforded.

Looking at all the difficulties we have faced since the pandemic occurred, we find a problem that needs to be solved.

Don't have global supply chains with so much dependence on Asia. The current length of the logistics chain should be modified to focus on the local market.
We will not become the same as the Asian market but we will open up a range of options for future unexpected catastrophes.

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