International logistics, in each of its aspects, has a great influence on national and international trade. However, it tends to be affected by different reasons, as in many other things.
Currently, international logistics is going through a complicated scenario, and it is important to understand what is happening and where these problems arise from.
The current international logistics landscape is somewhat complicated, and it is important to understand what is happening and where these issues arise from.
Russia and Ukraine: Conflict and sanctions
Since the beginning of the conflict between Ukraine and Russia more than 2 months ago, things have not been easy for either country. It is important to note that Russia is currently under many sanctions from different countries worldwide. However, their main challenges are undoubtedly coming from countries close to them.
Among the sanctions against the Russian regime, we can first find the prohibition of sending goods to that country. This prevents even natural persons from receiving anything they have bought abroad. In addition, the sanctioned persons will not be able to receive goods through international logistic channels.
This is the case in Rotterdam, where more than 7,000 containers are headed for Russia, but they will not be moved as long as the sanctions against Russia remain in place.
This problem at the moment does not seem to have an immediate solution, although there has been some relief on the issue of shipments. Still, the percentage has dropped sharply compared to last year’s operations.
Large importers and other logistics companies operating internationally are seeing the consequences of the conflict in both countries and of the sanctions imposed on the entire Russian country.
Lack of containers for shipments
Now it is time to talk about something vital: the containers that transport the goods. These are of utmost importance because all kinds of goods, and objects, among other things, are transported in them internationally.
However, there is much more to consider, such as what was said above about the containers currently stuck in Rotterdam. While it is true that 7,000 containers do not cover the entire fleet that may currently be available for logistics purposes, it is still a considerable number.
Moreover, let’s consider that there are companies of this style operating inside Russia and Ukraine, countries where the situation does not help them to operate. On the one hand, Russia, with its sanctions that prevent not only receiving but also sending goods from the country to other destinations, and Ukraine, hard hit by the conflict with Russia.
As a result, there are far fewer containers in transit today. This affects people and companies alike, some because they cannot use this type of service, and companies because they are affected at a very influential economic level.
Rising inflation worldwide
The year 2022 has been full of surprises for everyone. However, perhaps one of the biggest surprises, and problems at the moment, has been the rising inflation that has taken place in different countries across the world.
Countries such as Japan, the United States, France, and Spain, among others, have seen how inflation has played an important role in their economic development. This causes many activities to increase in price due to the current market.
Why does this affect companies related to national and international logistics? Because price increases will be present for them as well. The fact of having to increase costs makes it more complicated to reach more customers and maintain rates to obtain profits, so it is necessary to review and propose solutions to this problem.
However, we are close to the middle of the year, and this problem may increase even more towards the end of 2022, so logistics companies must be prepared for situations that may occur in these 6 months.
Lack of supply chain optimization
When talking about international logistics, we cannot ignore the fact that the goods, before reaching their destination, go through many controls and are most likely sent through different means.
Nowadays, this problem within the supply chain has been increasing, especially from a scenario where the pandemic greatly affected logistics companies worldwide.
Above all, we cannot forget that each company has its own ecosystem where technology, and the shipping process, among many things, play a fundamental role, so such process optimization will take a work that must start, almost certainly, from a low point to achieve the expected results.
If this problem is solved, it will allow companies and individuals to offer a better service on the one hand and on the other, to receive goods in a much faster and simpler way.
China: Hit by Covid again
Covid, far from being over, is still present as a silent enemy for many. This has brought problems of various kinds, and international logistics have been similarly affected.
However, while many countries have lifted their restrictions against Covid and people seem to be back to normal again, China has been hit by an outbreak among its citizens.
The country’s government did not expect the situation to escalate and acted quickly, but this has also affected shipments related to the Asian country. Above all, it is important to mention that China closed several of its ports, Shanghai being one of the most prominent, to counteract the disease’s advance.
This has affected part of the country’s imports and exports; although it is a situation that is likely to be solved once the outbreak is no longer a threat within the country, it is one of the problems that has a possible solution in the short term.
How will these problems affect international logistics?
Each of these problems has its degree of importance, especially for companies dedicated to logistics transportation. These problems are gradually diminishing, but the current outlook is somewhat compromised at the moment.
That is why at Looper, we always try to keep up to date with these types of situations to provide solutions and offer a quality service at all times to those who need it.