'Massive import demand' driving supply chain disruption

14 July 2021

Business and consumer demand for imports is driving supply chain problems in the US, according to an industry body.

The World Shipping Council (WSC) said only normalised demand, and not regulation, would solve supply chain delays.

The WSC spoke out in response to an executive order from president Joe Biden, which urges enforcement of “unjust and unreasonable practices in the context of detention and demurrage” in shipping. It suggested “further rulemaking” around these practices.

The WSC said extreme demand, combined with operational disruption brought about by the Covid-19 pandemic, meant all parts of the US supply chain was facing unprecedented pressure with a lack of rail and truck capacity and full warehouses and ports.

Biden’s executive order said the global container shipping industry had consolidated into a small number of dominant foreign-owned lines and alliances, which could disadvantage American exporters.

But the WSC said the driver of supply chain problems was demand for imports by US consumers and US businesses. 

It noted 11 months out of the last 12 had 10% year-on-year growth in spending on consumer goods. This compared to an average of 4.7% in the 18 years before the pandemic.

The WSC said the volume of US container imports was to blame for the stress on the supply chain. It said figures from Drewry Shipping Consultants showed eastbound volumes in Asian exports to North America rose by 34% in the first three months of this year, the highest since records began in 1995.

John Butler, president and CEO at the WSC, said this was not the fault of any given supply chain actor.

“Supply chains simply cannot efficiently handle this extreme demand surge, thus resulting in the delays, disruptions and capacity shortages felt across the chain,” he said.

“All supply chain players are working to clear the system, but the fact is that as long as the massive import demand from US businesses and consumers continues, the challenges will remain.”

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