In light of the ongoing lockdowns in Shanghai and other parts of China, Michael Wax, CEO and co-founder of Forto, a leading provider of digitised freight forwarding and supply chain solutions that was recently valued at $2.1 billion comments: “The recent spike in COVID-19 cases in China – and the resulting congestion around its ports – will have a domino effect on supply chains around the world. But it will take time – 6 weeks or longer – for this shockwave to reach European markets.
“The biggest problem for most businesses right now is not with international carriers, but a lack of production. Lockdowns mean labour isn’t available to keep factories running, or to move goods to China’s ports. Many suppliers currently have well-stocked warehouses in the EU, which will help to cushion the effect on consumers for the time being. But if these lockdowns continue, we may start to see reduced product availability in the coming months.
“The impact of this also depends on the primary mode of transportation used by a business. The bottleneck is not the ships: ports and shipping are, currently, generally functioning, whereas the airfreight sector is seeing a larger volume of cancellations.
“To mitigate the impact of this, we’re advising customers to allow for greater shipping times and to invest more time in planning, if they have suppliers that are operational. Now more than ever, it remains important to be flexible and make the most of real-time insights to inform supply chain strategies.”