Disruptions in global supply chains — which have led to a shortage of some goods — will take “quite a long time” to resolve and push consumer prices even higher, a shipping executive said.
Global trade bounced back strongly after a slump caused by the Covid-19 pandemic. But that has contributed to problems ranging from a shortage of shipping containers and warehouse capacity, to congestion at ports and a lack of truck drivers to move goods.
“This is going to take quite a long time to sort out,” Tim Huxley, chief executive of Hong Kong-based Mandarin Shipping, told CNBC’s “Street Signs Asia” on Tuesday.
“And each sector that is involved in this particular combination of black swan events has really got to try and address its particular issues,” said Huxley.
For one, the shipping industry is building more container fleet, he said. However, most of that new capacity won’t be ready until 2023 at the earliest — until then, a shortage of ships persists, Huxley added.
In addition, more investments in infrastructure like ports, roads and bridges are needed — but that, too, could take years to materialize, he said.
“All of these issues, they are here to stay for quite a while to come,” said the CEO.
“So I’m afraid that this is actually going to end up translating into higher costs for consumers down the line and indeed shortages of some goods,” he added.
Bottlenecks in global supply chains have threatened the supply of a whole range of goods, including food and beverages, consumer electronics and Christmas decorations.
Such constraints have contributed to higher inflation. Some economists have warned that inflation could stay higher for longer than expected.
The International Monetary Fund said last month that it largely concurred with assessments that current price increases will eventually ease, but noted there was “high uncertainty” around those forecasts due to inflationary risks in developed nations including the U.S. and the U.K.
The Fund said central banks should be prepared to tighten policy in case inflation gets out of control.