What is the global cargo crisis and why is it happening?

Like a number of industries, freight shipping is facing a global crisis with a worldwide shortage of containers. Caused by a knock-on of various factors, containers have been left in depots, onboard ships and abandoned in ports. Whilst this in itself isa problem, it also means that the supply chain has been heavily impacted, especially in areas worst hit by the shortage such as Asia.

We’ll explore the reasons behind the shortage, how it’s affecting global supply chains and potential solutions.

What caused the shortage?

Lockdowns, due to the pandemic, caused a global stop in production,depot and factory closures, as well as a huge number of workers ceasing to carry out their jobs. This, in turn, created a big impact on trading around the world.

With both imports and exports affected, the cargo industry has been struggling to keep up with the backlog and the ongoing lack of workforce has also meant recovery has been hampered. Containers remain discarded in ports and depots, despite shipping traffic increasing, meaning some parts of the world are suffering a bigger cargo crisis than others.

The impact of the Russia/Ukraine conflict

With many countries across the world placing sanctions on Russia due the conflict in Ukraine, the cargo industry has suffered yet again, with all but essential goods being transported in and out of the country. The removal of Russian-based cargo companies means that the global trade supply is being further impacted, with demand not being met.

This is adding to other shortages across the world, including grain, oil and wheat, which, in turn, is contributing to the negative effect on the global economy and across foreign trades and investments.

Solutions to the cargo crisis

To get round this issue, many companies are sourcing production opportunities or supplies closer to home. Aside from paying more and relying less on global transportation, there’s not a great deal else many can do to swerve the supply trade problem. However, this is leading to issues where only the largest and most lucrative companies can afford the increased shipping costs, often due to their ability to sign up to lengthy contracts.

With late deliveries, increasing costs and backlogs, it’s clear the cargo industry needs to adapt a more flexible strategy to support the ever-expanding network of global trade.


Zaman Lashari
Zaman Lashari
Articles: 699

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