Shipping containers and lorry drivers are among the core pillars of the supply chain network, and the absence of such entities is causing disruptions in the flow of businesses. Only a handful of businesses were thriving amid the coronavirus outbreak pandemic, while the rest either crumbled down or were on halt. After a long period of restricting most economic activities, businesses were allowed to open, and they faced major challenges in trying to get back into the game. Most employees had resigned or indulged in other professions to aid themselves during the pandemic. Professions such a driving require manpower on the ground, so they were affected by lockdown and “stay at home” movements. This also affected the manufacturing industry, which needs staff to operate machinery and package the produced goods.
After the businesses opened, managers had to deal with the problems affecting their sales, manufacturing, supplying, and delivering services.
Shortage of Shipping Containers
Regarding packaging, it was revealed that shipping containers are scarce despite being seen stationed at various ports. Shopping containers are vital for packaging bulk goods while ensuring the safety of the goods being transported. The trading world is puzzled by the unavailability of shipping containers, and companies uttered how hard it is to find any available containers. Currently, importers and exporters from numerous countries are rushing to conduct their business across a web of networks involving many foreign players.
This has resulted in a high demand for the steel boxes used in the global trade networks. Surveys show many of these boxes left at sea or along ports, and others appear dumped at the shores in Europe, Asia, and Northern America. The flowing of cargo has increased, and many goods are being transported, especially necessities for the global pandemic, such as PPEs, vaccine doses, latex gloves, and syringes. Tim Boyle, chief executive of Columbia Sportswear Co., termed the shortage of containers as “container dislocation” [Source].
Professor Willy Shih of the Harvard Business School argued that “What you see is a messy buildup of containers in places where they’re not supposed to be,” and this “disarray” was caused by the pandemic [Source].
Others cited that the shortage was caused by how cargo flow was stopped during lockdowns, resulting in people not collecting the empty containers. For instance, Asian containers in the American regions could not be sent back because of covid-19. The situation was also worsened by the lack of staff responsible for collecting the container due to travel restrictions imposed in most countries [Source].
Due to this, the demand for containers had skyrocketed at suppliers such as Maersk. According to the company, its earnings rose from $1,7 billion recorded last year to $5.1 billion this year. This was enacted by a 60% revenue surge, which translates to $14,2 billion. Maersk CEO said, “Right now in container shipping, we have effectively unmet demand. The global capacity is not able to lift all of the demand, and that is what is driving up freight rates” [Source].
He added that “At the same time, of course, we have had congestion in Los Angeles, we have had the Suez Canal closed for a week, we have one of the largest ports in China closed for more than a week in the last quarter, and that takes our capacity from the market, which adds to the problem, so to speak.”
Lorry Drivers Shortage
Lack of staff is another pandemic hitting the delivery sector of many businesses. Brewers are failing to supply pubs due to a shortage of lorry drivers, and pubs were urged to work with closer suppliers. Bars in Scotland are reported to be almost dry because of this [Source].
Statements brought forward by drivers show that “Poor wages and working hours are causing UK lorry driver shortage,”. It is now a major problem expected to cause problems in the upcoming festive season as many customers’ goods will not be delivered in time. The Road Haulage Association (RHA) estimated the shortage of drivers to be around 70 000. Rod McKenzie, managing director of policy and public affairs at the RHA, said, “We are losing more lorry drivers week on week than we are gaining.”
Factors leading to resignation are linked to low wages, poor working conditions, and a “lack of clean, safe and well-priced service stations on the road.”
This affects the supply chain market among European borders and in other parts of the world such as the UK and US [Source]. Alexandra Ozolina, a logistics and freight forwarding professional under the World Transport Agency, said, “There’s been a drastic reduction in the supply of HGV drivers at a time when there’s been a big increase in demand, so we’ve seen the price of HGV drivers double since the beginning of July in the UK.”
In assessing the factors which fuelled this condition, Logistics UK stated that “At the start of the pandemic, there was a shortfall of at least 76 000 HGV drivers and with the additional loss of EU workers who have returned home, the industry estimates that this number is now higher than that.”
In other words, Brexit conditions which forced EU workers to relocate widened the shortage. Another factor highlighted are issues hindering new drivers from becoming qualified personnel. To become an HGV driver, there is a need for training which costs around £3,500, and many people hesitate because it is expensive. More so, the safety of the workforce is under question since there are no safe and secure locations where drivers can stop for a legally mandated rest, and the UK government is yet to deliver on its promise of 1 500 parking spaces proposed back in 2018. The government is willing to address the problem by recruiting additional vocational driving examiners in England and Wales.
The lack of shipping containers and lorry drivers presents a new pandemic to the global trade network and the supply chain industry. Such disruptions affect businesses and the public who are in dire need of their goods to be delivered. These shortages need to be rectified, especially with the festive looming at which the demand for goods and services will rise to unmanageable levels.