DUBAI
Global supply chain disruptions triggered by the Covid-19 pandemic will continue to linger for years until the backlog of cargo is cleared
Sultan Ahmed bin Sulayem, group chairman and chief executive of global ports operator DP World, said this in an interview with CNN.
Even if the pandemic were to end today, “it will take another two years for the supply chain to adjust, to be able to remove the backlog cargo out over the ships into the customer’s hand”, Mr bin Sulayem said. “This year and next year, there is no way we can move the cargo that is stuck.”
The Covid-19 pandemic highlighted significant challenges in the logistics sector, with many cargo owners struggling to find containers to move their goods to keep pace with demand and overcome labour disruptions.
The acute supply chain bottle-necks worsened during the holiday season in December when the surge in demand was met by severe delivery delays.
The disruptions led to congestion and delays at ports, a shortage in shipping containers and a sharp rise in the cost of shipping goods.
Mr bin Sulayem also said that he believes shipping costs will stay high for the foreseeable future. “I am optimistic that we are taking steps, us and the shipping lines, to ease the congestion. But I don’t believe the cost of shipping is going to reduce. I think it will stay for a while,” he said.
DP World has performed well by investing in the entire logistics chain, not just carrying cargo, but also owning ports around the world. “We have been, I think, fortunate that we are farsighted in investing a lot in logistics. If you notice what we invested in the last six years, it is exactly what the shipping lines are today doing,” the chairman said.
“They are acquiring logistic facilities, warehousing, and distribution companies, we did that already and that is what’s helping us a lot to deal with cargo, to be able to move the cargo. Six years ago, we only had the business inside the ports. Today, we are outside the port.”
