The operator of one of the busiest ports in the world has suggested that global supply chain bottlenecks will last for around two years.
Speaking to Bloomberg News, Dubai’s DP World Chairman and Chief Executive Sultan Ahmed Bin Sulayem said he expects bottlenecks to continue until 2023, and warned that the issues will result in higher costs for shipping goods.
“The global supply chain was in crisis in the beginning of the pandemic,” Sulayem told the media outlet. “Freight rates will continue to increase.
“Maybe in 2023, we’ll see an easing.”
Some analysts and other port operators have said that supply chains are struggling to keep pace with demand and deal with labor disruptions due to the COVID-19 pandemic, lockdowns, and quarantines.
Sulayem’s DP World is one of the largest operators of marine ports and cargo terminals in the world, with hubs in Africa, India, Russia, Europe, and the Americas.
“Even now, every time they see an incident of COVID in China, they shut down a port,” he said. “Many manufacturers around the world are delayed by as much as three years because they can’t get components from China. They’re taking a very, very aggressive approach.”
Suggesting a move away from relying on Chinese markets and possibly the regime’s controversial Belt and Road Initiative, Sulayem noted that there’s “huge potential in India and that reflects in DP World’s investments. Africa continues to grow, and there’s also Southeast Asia, mainly Indonesia.”
The world’s largest shipping firm, A.P. Moller-Maersk, warned that bottlenecks could last longer than anticipated.
“There have been many challenging periods over the years, but the situation over the last 12 months is unique, in as much as it has had a global impact. All continents are seeing high volumes and operational challenges, restricting both ocean and land-side capacity at the same time,” Maersk said in a mid-September update.
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