As the global economy begins to recover after the disastrous effects of the covid-19 pandemic, global supply chains continue to experience disruptions and challenges. Many businesses and industries reduced or completely shut down operations in 2020, which led to a dramatic reduction in the overall industrial activity. Now that the severity of the pandemic is beginning to decline, consumer demand has soared, and supply chains are struggling to bounce back to pre-pandemic standards.
To continue to provide a quick, smooth and well-structured level of logistical competency over the last two years, we have had to work hard to ensure we continue to provide the best service to our customers. In today’s blog, we look at some of the key issues global logistics have faced over recent years.
Increased Freight Rates
Towards the end of 2020, global shipping costs began to recover from the lows reached during the height of the pandemic. However, freight rates are now experiencing some of the highest levels since the Great Financial Crash in 2008. From vehicles and ships not being able to cross borders due to public health restrictions to workers being sent home sick from Ports, the effects of the global pandemic led to the realization of the importance of maritime trade to the global economy. Congestion issues across the Ports in Europe and the USA and decreased air freight capacity due to travel restrictions were also catalysts in the increase in international freight prices.
As the global pandemic fueled the increase in freight rates over 2020 and 2021, various industry experts now believe that freight costs will remain at current levels as we progress in the year ahead. The Russia-Ukraine conflict and Covid lockdowns in Shangai continue to impact global freight rates, and it’s projected this will continue into 2023. Our team here at PG expects to be presented with many more challenges between now and next year and will continue to aim to keep freight costs to a minimum.
The maritime supply chain industry was hit hard by the Covid pandemic in 2020, as shipments were no longer running as smoothly as they previously were. Staff shortages were the focal point of the damages to maritime supply chains, as restrictions on international travel were firmly introduced. Self-isolation also played a huge part in firms’ inability to operate to their full potential. In England and Wales, approximately 700,000 people were instructed to self-isolate in July 2021. The reduction in vocational training was also detrimental to the industry, as the availability of newly qualified staff dramatically reduced due to the pandemic.
However, global supply chains experienced many more challenges out with staff shortages. They were also struggling with the availability of raw materials, the closure of ports, equipment shortages as well as vehicle capacity reductions. As we continue to face these external pressures, it remains our priority to offer a high-quality and reliable service to our customers.
With the vote on Brexit resulting in the UK’s departure from the EU and a new trade deal, many industries have had to adapt to new rules and regulations. Unfortunately, the logistics sector within the UK & EU has been one of the hardest hit due to the separation. Since leaving the EU, UK export prices have dramatically increased from what was traditionally quite low. Inconsistency within the UK-EU trade deal has also been difficult for many involved within the industry, which has made things much more difficult for EU exporters. In addition, lead times have also increased indefinitely due to the increased amount of paperwork that is involved alongside each transit. Despite having to adapt to many changes, our team was quick to implement actions to ensure our operations continued to move globally with minimum disruption.
Although global supply chains have faced trying times due to several reasons over the past two years, we have made it our goal to continue providing aid to global communities. In 2021, the PG Paper team harnessed resources across their Chinese, Indian, Turkish and US offices, securing close to 5,000 oxygen concentrator units across the globe. The essential lifesaving equipment was delivered to India, who were facing a surge in covid-19 cases and distributed to hospitals, covid centres and organisations around India in a concerted effort to meet the country’s urgent need for oxygen.
More recently, our logistics team worked on a project which involved providing charitable donations to Poland for Ukrainian refugees. In the month of March, The International Society for Krishna Consciousness (ISKON) also donated 500 bags full of stationery to underprivileged children on behalf of PG Paper. We are delighted to be a part of important projects like these, as we strongly believe in helping global communities that are in need.