Shipping Giants Signal Prolonged Disruption Ahead for Global Trade

As reported by Kuehne + Nagel, the ongoing turmoil in global supply chains can’t solely be attributed to tariffs imposed during the Trump era. A mix of issues, including hazards in the Suez Canal and severe port congestion, have exacerbated delays and inflated shipping costs, complicating long-term planning for businesses involved in international trade.

“The landscape of sea logistics is fraught with uncertainty,” remarked Bill Rooney, executive VP at Kuehne + Nagel, during his speech at the Agriculture Transportation Coalition (AgTC) Conference held on June 17 in Tacoma, Washington. “Keep your helmets on—this situation isn’t resolving anytime soon.”

Rooney highlighted that the Global Trade Policy Uncertainty Index—a tool used by Econovis to gauge economic instability—currently stands at a staggering 500.For context, this index peaked around 250 during the pandemic and is now substantially higher than it was during historical events like the Nixon shock of 1971 when global monetary stability was disrupted.

He also cautioned that transits through the Red Sea are unlikely to normalize by 2025 due to escalating tensions between Iran and Israel and also renewed attacks from Houthi rebels on vessels traversing that area. Consequently,shipping companies are rerouting around Africa’s cape of Good Hope which not only increases costs but also adds thousands of miles to journeys while delaying about 6% of global shipping capacity typically routed through the Suez Canal.

The situation is further complicated by severe congestion across ports in Europe and Asia; many facilities have been operating near full capacity for months. In Europe alone, waiting times for ships have surged—Antwerp saw a rise of 37% this spring while Bremerhaven experienced an astonishing increase of up to 77%, according to Kuehne + Nagel data.

fabio Santucci, CEO of Mediterranean Shipping Company (MSC), estimates that nearly 10% of container fleet capacity remains stuck at congested ports worldwide. “Port congestion quietly undermines efficiency,” he explained to agtc attendees on June 17. “you face challenges like yard inefficiencies and excessive cargo inland—all contributing factors.”

Read More: The True Cost of Tariffs Becomes Clear at U.S. Ports

This chaos was echoed earlier this month when Jacques Vandermeiren, CEO of Port Antwerp-Bruges described conditions as chaotic due to low water levels affecting transport routes like the Rhine River alongside labor shortages and strikes disrupting operations. additionally, extreme heat has caused technical failures at Rotterdam’s port leading them temporarily close terminals while repairs were made.

A sudden halt on tariffs against China announced late May led importers scrambling; freight bookings surged by an incredible 300% within just one week as businesses rushed shipments ahead of an impending August deadline for a new trade agreement between both nations. Freight forwarder Metro Shipping reported wait times ranging from one day up to three days across major Asian ports such as Shanghai and Yokohama amid widespread delays.

Santucci noted how operating above a threshold capacity creates meaningful inefficiencies with limited space available for cargo movement resulting in longer dwell times which can ripple throughout supply chains causing further delays inland via trucks or trains transporting goods.

Transshipping has become increasingly challenging too; congestion levels mirror those seen during peak COVID periods according to MSC’s observations.

The cumulative effect? A stark decline in reliability regarding shipping schedules—with only about 58% vessels arriving punctually compared with historical averages closer towards 75%. Rooney pointed out another issue: container ship speeds have consistently decreased over time due largely as carriers are slowing down their vessels both for fuel savings purposes along with compliance requirements related emissions standards today average around 14 knots, whereas back in 1973, ships cruised comfortably between 25-27 knots!

Together these obstacles illustrate just how strained our global logistics networks remain amidst ongoing disruptions without any clear resolution insight yet available! From tariff fluctuations right down through persistent bottlenecks faced daily—it’s been quite a ride over these past five years forcing industries everywhere rethink everything from sourcing strategies all way through scheduling practices simply stay ahead next potential shockwave hitting market!

“It’s incredibly dynamic out there,” concluded Santucci succinctly summarizing current state affairs!