The Head of Ocean Express Warns That Disruption to The Global Economy Could Stretch Into 2023
It seems that all nations are caught up in the web of the crisis that arose within the global economy. The Covid 19 pandemic that broke out late 2019 has caused many industries a fortune, and many are yet to stand strong again. This downturn in the economy has ravaged many big industries. An industry that experienced great loss is the freight industry.
Looking back to those moments and thinking of the way forward, Jeremy Nikon, who is a chief executive of Ocean Network Express, a company that has over 6% of the world’s containerised freight, has proffered some solutions that can help the freight and the airline industries to get back. However, it is based on the proactive measures of the government. Based on his assertions, he opines that until the best approach is used to tackle it, a greater crisis might break out far-reaching into the year 2023. He further thinks that to get out of this economic mess, the government should
- Boost investment in the capacity of their ports, railways, warehousing, and road systems.
- Provide a working system that sees to the improvement on the affected areas of the economy
- Stop focusing more on the aspects of the economy where the demand has had no significant impacts and begin focusing on where there is always a heavy pull and demand.
The Present State of the Freight Industry Post Pandemic
One of the aftermaths of the Covid pandemic is that there was a huge fall in shipping demands. However, there was a change towards the end of 2020, which caused port jams and lots of blockages in the seaports globally. Now that there is a surge in demands, another challenge is that there is a serious shortage of dockworkers and truckers
Efforts in Place by the Government to Solve the Post Pandemic Crisis
Although there have been moves by the US government to improve more on these aspects, there is still a lot to be done. As part of the move, the government has planned to clear clogged up Southern California ports by improving their services to a 24/7 schedule. This is one of the means to make sure a cover-up is provided for the lapses caused by the pandemic.
Criticisms Against the Efforts Made by the Government
In reply to the solution mentioned above by the government, some experts have responded, saying that they do not see the huge difference this new change can impact. They argue that their services would remain the same if the other warehouses and truck drivers were not in tune with the same delivery pattern. Besides that, Nikon also criticised the move of the US government in the sense that he’s yet to see the immediate effects after the announcement. According to him, the industry should brace up for another disruption next year due to the close in the US West Coast ports.
Crisis Looming Over the Freight Industry and Actions Already in Place
Nikon reminds us that the contract negotiations are scheduled between the terminal operators and the dockworkers. This will result in fatal delays. In a bid to salvage the suggested delays, many retailers have reportedly taken it upon themselves to reroute cargo away from these places during that time to avoid the presumed delays.
Concluding Recommendation by Experts to the Government
The efforts thus far, although promising, are not enough. Not only that, but the chain of supply that has broken has added to the menace causing a rise in the cost of commodities. Unless the government takes proactive measures against this potential economic disaster, we can expect to see an even bigger burn in the global economy in the times ahead.