Consumer Demand Must Slow To End Shipping Crisis
The CEO of the port and terminal division of the world’s largest shipping group, Maersk, has warned that the only way to counter the global shipping and supply chain crisis is to slow down consumer demand.
APM Terminal CEO Morten Engelstoft called the problem a “vicious circle” created by a COVID-driven demand for goods that suppliers and shipping companies cannot keep on top of.
“We need to work out how we break this vicious circle,” Engelstoft told the Financial Times, noting how imported goods were up 20 per cent over the previous year in the US.
“It’s a percentage of an enormous volume. The sheer size of business going through is so enormous that the amount of port capacity, truckers, warehouses and even labour to man all the equipment has created a bottleneck.
“We need lower [consumer demand] growth to give the supply chain time to catch up, or differently spread out growth. Over a long period of time, we will need to recover efficiency.”
Congestion peaked last week at ports in Los Angeles and Long Beach, with over 40 container ships banked outside the ports, a new record.