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Think deeply! Recession, geopolitics and cost top supply chain concerns

Lian Sofreight,.com 2023-05-16 18:12:45

Recently, Container xChange surveyed 1,200 supply chain professionals, asking what factors will affect the shipping industry in 2023. Forty-nine percent of respondents said the US recession was the main concern for the freight forwarding industry, followed by geopolitical tensions (32%) and rising operating costs (22%).







Container xChange warns that international wars and tensions over China and Taiwan risk global trade being fragmented by geopolitics.


"These high-stakes geopolitical tensions could divide trade blocs and could lead to a world where trade is less efficient because you can no longer trade with everyone and trade is restricted to block-by-block." Joint Venture, Container xChange Founder and CEO Christian Roeloff said.


“The vicious cycle of rising U.S. interest rates, heightened banking instability, tighter access to credit, falling commercial property values ​​and, eventually, recession is also having a major impact on supply chains,” Roeloff said.







In addition, rising operating costs, driven by energy prices and labor costs, which are not expected to decline, coupled with higher warehouse space prices due to higher terminal tariffs and supply constraints, have also created additional pressure.


Aaron Callahan, owner of a container trading company in the US, said: "Overall, the container market is very volatile at the moment, changing from week to week, so there is risk in predicting what will happen six months from now."





“We are facing high demurrage and detention charges, operating costs, and other expenses related to container storage and transfer. Demand is not going to recover anytime soon, and on the other hand, there is ample capacity and supply of containers. Most of us We are all there, working to build resilience and consistency across our business, which is critical to business."


In conclusion, the U.S. recession, geopolitical tensions and rising operating costs have topped the list of concerns for supply chain professionals.