Logistics havoc causing new supply chain delays, rising costs for consumers

Consuming markets of commodity raw materials are under pressure yet again from a combination of renewed increases in sea freight costs and overstretched logistics, making delivery schedules unreliable and causing long delays at a time when suppliers are tightening contract terms to reduce liability.

While industry analysts debate fiercely over whether a new commodity supercycle (a period of consistently high commodity prices against historic levels) is under way or not, pressure points have built up in mining supply chains between origins in Asia – especially China – and western destination markets.
The sector is facing a second round of the logistics headaches out of China that first hit last October-November, characterized by a shortage of containers, vessel space and vessels altogether.
Combined with the increase in trade flows since the first quarter of the year – fueled by strong outlooks across markets and economies recovering from the Covid-19 pandemic – localized operational issues due to Covid outbreaks and intermittent port operations, moving heavy cargo including mineral raw materials and metals is proving ever more challenging.

Turnaround times for ships that have reached ports to unload, load new cargo and sail off is stretching at both ends of a...

Published

Davide Ghilotti

May 10, 2021

16:41 GMT

London