Following 2020’s lead, in 2021 the logistics and shipping industries have seen their fair share of challenges, unexpected circumstances and difficulties due to the pandemic all of which have made adaptation to the new global state a must. A transformation that will surely continue in 2022.

Although it’s expected this new year the situation will be more stable, or at least easier to manage thanks to everything learned in the last months, uncertainty still weights in the future of the shipping industry. An uncertainty brought not only by the pandemic but also by the new regulations in China and the climate change, key aspects to consider when imagining the future of the logistics and shipping future. 

With all that in mind, we’ve compilated some of the most important topics to focus on this year if you want to keep offering your best services this 2022 and be able to predict if possible and adapt faster to the changes the new year may bring.

How will the shipping and logistics sector change in 2022?

When we talk about shipping and logistics we are, in the end, talking about the supply chain and as with any other chain, it’s links depend on each other, making their futures also dependent of one another as we’ll see below,  where the three main problems to face still in 2022 come from the pandemic but are intertwined.

High prices, congestions and lack of personnel: The big affectation triangle. 

There are three main problems to worry still in 2022, and those are the rising in shipping and container prices, port congestions and waiting times, and the lack of personnel. 

Although it’s true that freight costs have been slowly falling in the last months, most probably because of the end of  peak season, container and shipping prices are still almost ten time higher that before the pandemic. However, with the Lunar new year in just a few weeks and the resulting closing of factories and production in China plus the long waiting times in the West Coast of the United States it’s very difficult to say whether the prices are going to really go back to something resembling normal during 2022.

Congestions in major ports (like the ones in the West Coast or China) are expected to dilute in the following months, although this strongly depends on Covid breakouts and the measures to quarantine those areas.  Waiting times have multiplied all over the world, but at the moment California has it the worst with Los Angeles and Long Beach ports experiencing so many problems vessels are changing their courses and docking at the East coast ports instead.

And the last piece of the triangle: workers. Lack of personnel has become more and more frequent and causing difficulties in the correct operation of ports, terminals, warehouses and much more.  Covid breakouts are one of the causes for this but shortage of skilled professionals is something that has been a long time coming and just made visible due to the pandemic. Not only there’s a shortage of professional truck drivers or logistic operators, there’s also a rising need for new profiles, focused on digitalization, automation and the new technologies that will conform the future of the industry.

Increase in airfreight 

Shipping has suffered an important blow during the pandemic and this has made air traffic rise significantly.  According to the IATA demand for air cargo has increased a 7,9% in 2021 (compared to 2019) and it’s on its way to increase another 13,2% this 2022. This method of transportation has become vital for a lot of companies (the ones who can afford it), who have seen their supply chain disrupted or stopped and needed a way to deliver their cargo.

It should also be important to have in mind the changes shipping companies like Maersk or CMA CGM are doing, buying fleets to offer new air services as well as maritime ones. 

New routes and services

Something that was well known what has become even more clear with the pandemic is the dependency of most companies and supply chains on China (and Asia). After all the disruptions due to lockdowns and quarantines in the zones companies have started to consider relocating to a closer distance that will make it easier to deliver their cargo if the Asiatic giant decides to close its borders again. These relocations will make it necessary to change and adapt routes and services, perhaps even increase the offers for rail services. 

New contract negotiations

All those effects the pandemic has had in the industry can be well seen in the new contract negotiations for 2022-2023. This year new contracts not only focus on negotiating a good price (whatever this means in the middle of the rapidly changing market) they also focus on securing enough space to be able to move and deliver cargo.  

Usually, negotiations start at the end of the year and are closed in April or May but this year contracts are being signed almost three months earlier due to the uncertainty and how will the sector be affected in the following months.  On the one hand, shippers want to make sure their prices are something close to decent and that they will have enough space secured to answer the increasing demand of the market. On the other, carriers are playing their privilege giving still too high prices (that they know are going to be accepted) and contracts that go beyond the usual 12 month period, as well as entering in those contracts integrated logistics services provided by themselves to be present in most steps of the supply chain.
This lack of space has made, in turn, bigger shippers ask for a larger minimum quantity contract space leaving NVOCCs and minor shippers with even less space to work with.

Digitalization and sustainability 

Another turning point that needs to be made this 2022 is reaching real digitalization of the industry and actual change towards a sustainable future for the shipping sector. This is something that has been talked about in the last years but as much of what we’ve said in this post, the pandemic has made even clearer how important this is.

Digitalization and process automation have been a big help during the pandemic and new technologies like 5G or IoT will only make themselves more present and transform the sector, a transformation that needs to go hand in hand of sustainability, adapting along vessels and trucks with greener energies and changing laws and regulations.

Changes in the shipping lines

Shipping lines have benefited most from the pandemic and its crisis and they will continue doing so in the following years. Focusing on what big players like Maersk or CMA CGM are doing with this large quantities of money we can sketch a little bit more of what may come in the future and how can this big players transform it, be it expanding their core business, changing altogether or just making the most of the momentum to try and gain an edge on the competition.

• Fleet expansion: The first step on the fight against lack of spaces has been buy new vessels, brand new or second hand, to expand shipping lines’ fleets. We don’t know what’s going to happen with the surplus when the market stabilizes but as we’ve said, this may also be a step towards surpassing the competition or, at least, obtaining as much benefits as possible while the situation allows it. It’s also worth noticing CMA CGM has bought 10 ice-breaking container ships to expand its presence on the Baltic, which may gain importance with the changes brought by climate change.
• New services: Shipping lines have also started to expand their services further from shipping. For example, as said before, Maersk and CMA CGM have bought airplane fleets to offer air services too. For its part,  Mediterranean Shipping Company has bought 12 new cruise ships, making it the fastest-growing cruiseline over the next years.
• More control of the supply chain: Faced with such disruption, several companies look for better control of their operations and supply chain, that’s why some of them have invested some of those pandemic benefits in buying port terminals, warehouses or even freight forwarding companies and other logistics companies. This way they can offer and integral transportation service that goes from end to end. That seems Maersk’s goal, as they have recently, as well as all of the above, started managing all logistic operation for Unilever, one of the biggest consumer goods companies.

In these estrange and uncertain years the pandemic has brought, the logistics and shipping industries have changed and we know they will continue to do so, it is inevitable. Observing we can draw a draft of what the future may look but a precise and clean vision is difficult in the midst of all those changes and challenges. But with that draft and a keening eye one can adapt and transform in time to soften the blow as best as possible. Only time will tell which of these trends and prospects will come true, but we hope to see you in 12 months to continue talking about the sector, its changes and what’s in store for us!