This was supposed to be the year that gummed-up supply chains started to normalize. So far, that’s not happening.
Logistics company Flexport Inc. tracks the average journey for containers that leave Asia for Europe and North America, from the time they’re marked ready at factories to when they’re picked up at destination ports. The length of those journeys has roughly doubled over the pandemic and remains near record highs.
In particular, Flexport says that handling times at the first stage of shipping – up to when cargo leaves the origin port – have materially worsened in recent weeks. On popular routes between Asia and North America, “estimates from industry experts indicate a return to pre-COVID normalcy would take several months to a year,” the company said on its website.
The lack of progress this year is a troubling sign for inflation, which in Canada, hit a three-decade high of 5.1 per cent in January. Central bankers have repeatedly pointed to supply-chain disruptions as a key driver of lofty inflation.
Those troubles can vary. The auto industry, for example, has curbed production over a shortage of computer chips. But other industries are seeing a surge of consumer orders, leading to congestion at ports, shipping delays and sharply higher rates for containers.
Nova Scotia’s High Liner Foods Inc. is one of many companies that’s raised prices in response to higher costs, including freight. “When we pass price, it’s focused on protecting our bottom line,” chief financial officer Paul Jewer said Wednesday on an earnings call.
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