Bottlenecks in the supply chain will take time to resolve: The company’s CEO

Disturbances in global supply chains – which has led to a shortage of some goods – will take “quite a long time” to resolve and push consumer prices even higher, a shipping chief said.

Global trade returned sharply after a downturn caused by the Covid-19 pandemic. But it has contributed to problems ranging from a lack of shipping containers and storage capacity, to congestion in ports and a lack of truck drivers to move goods.

“This is going to take quite a long time to fix,” Tim Huxley, CEO of Hong Kong-based Mandarin Shipping, told CNBC’s “Street Signs Asia” on Tuesday.

“And every sector involved in this particular combination of black swan events must really try to solve its particular problems,” Huxley said.

… I’m afraid that this will actually end up in higher costs for consumers later on and actually a shortage of some goods.

Tim Huxley

CEO, Mandarin Shipping

First, the shipping industry is building more container fleets, he said. However, most of the new capacity will not be ready until 2023 at the earliest – until then there is still a shortage of ships, Huxley added.

In addition, there is a need for more investment in infrastructure such as ports, roads and bridges – but it can also take years to realize, he said.

“All of these issues, they are here to stay for a while to come,” the CEO said.

“So I’m afraid this will actually end up translating into higher costs for consumers later on and actually a shortage of some goods,” he added.

Bottlenecks in global supply chains have threatened the supply of a wide range of goods, including food and beverages, consumer electronics and Christmas decorations.

Such restrictions have contributed to higher inflation. Some economists have warned that inflation may remain higher for longer than expected.

The International Monetary Fund said last month that it broadly agreed with the assessments that current price increases will eventually slow down, but noted that there was “high uncertainty” about these forecasts due to inflation risks in developed countries, including United States and United Kingdom

The fund said central banks should be prepared to tighten policy if inflation gets out of control.

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