Inflation and recession top 2023 supply chain fears list Port of LA

Release date: 2023-01-18
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Inflation and recession top 2023 supply chain fears list Port of LA

A survey of supply chain business leaders found that inflation and recession are the main fears for companies as they enter 2023.

Container logistics platform Container xChange released its Container LogTech 2023 predictions report, which surveyed leaders’ hopes and fears for the coming year through a survey, polls, and interviews.

Inflation and recession topped the list of fears with 88% of respondents noting them as factors for 2023, followed by implications of war with 57%, impact of COVID in China at 53% and worker strikes at 23%.

The expectation is for a year of falling rates and rising industrial action, with the report highlighting 23 trends for 2023. Among the trends were container vessel deliveries, ongoing dept congestion, rising fines and storage fees, a container price war, capacity cuts, friendshoring, and changing work cultures post-pandemic.

“Due to inflation increasing, there’ll be more unrest in the labour market which will certainly lead to more strikes, specifically in Europe, the UK and North America. And as we have seen before, strikes result in slow operations within the port which can exacerbate supply issues,” said Aamir S. Mir, COO, Caspian Container Company SA as part of the interviews.

The labour issues are expected to be driven by continued inflation, pressuring worker incomes and standards of living in Europe and North America.

“Two, almost three exceptional years for carriers are definitely coming to an end. They will have to adapt back to lower margins due to a different supply and demand balance. Many customers, forced into high-cost contracts during the up-cycle, will come for revenge in the down cycle. And regulatory pressures, following excessive profits might appear on top of that, be it through bodies like FMC, EU or China’s MOC, as they each review alliance exemptions, new taxation regulations, or precedence cases from several complaints raised by shippers at different institutions,” said Ruben Huber, Founder and Director, OceanX.

“The overall outlook for the year 2023 remains gloomy. Europe is hit hard with an all-time high inflation; China struggles to cope with the virus and the US continues to witness hinterland transportation challenges and labour unrest. Most of these challenges will stay in 2023. Consumer confidence will pick up, but it really depends on whether we witness more disruptions in the coming times.” said Christian Roeloffs, cofounder and CEO, Container xChange.

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