b'SHIPPING & TRANSPORTsimilar ease in congestion in early 2023,The combination of historic low vacancy however the outlook for the balance of the year is uncertain. Strain on the rail andrates for warehouse space, high inflation trucking industries stemming from labour disputes and shortages is expected toand lower consumer demands has further exacerbate the situation and add to inflation on consumer goods.reduced shipping rates across all modes of The trucking industry, while historicallytransportation since the pandemics peaksuffering from high turnover rates, faced an even stronger shortage of drivers throughout the pandemic due to illnessreflecting a drop of over 80 per cent.There are also encouraging signs on the and quarantines. According to AmericanRates could potentially dip even furtherhome front. The proposed $31-billion Trucking Associations, there was a short- before stabilizing.merger of Canadian Pacific and Kansas fall of 80,000 drivers in 2021 alone.City Southern Rail has the potential to Moving into 2023, the transportationThis comes at a time when major ship- ease freight movement between the industry continues to remain on a razorsping lines are delivering new cargo shipstwo countries in what would become edge for staffing, and today there is ain response to the 2021 boom, andthe first continental rail network. And massive amount of goods that need tothis poses the risk of saturating markete-commerce giants have taken matters regularly be moved from ports to distri- capacity. As well, a free-fall in shippinginto their own hands to address ship-bution hubs.rates from Asia to North America createsping challenges and logistic bottlenecks. new challenges as large customers (likeSince 2021, Amazon has leased cargo Even when the goods are offloadedAmazon) and shippers vie for stable from cargo ships and finally make itpricing and guaranteed rates. For thisvessels and refurbished passenger jets onto rail and truck, they face yet anotherreason, businesses will continue to seeto expand its delivery abilities. hurdle: warehouse capacity across Northhigher-than-normal shipping rates for America will remain tight into 2023.the end-customer into 2023.The myriad of challengesCOVID-19 in Market reports indicate that U.S ware- China, fluctuating trans-Pacific shipping house vacancy rates were at a low 3.2Finally, Chinas COVID-19 outbreak incosts, inflation, warehouse space, and per cent for the third quarter of 2022,late 2022 added yet another barrier tolabour disputesare all daunting. And in far below the historic five-year averagethe return of a stable shipping market.a global marketplace, everything is inter-of 4.7 per cent. Canada has seen similarAggressive lockdowns driven by theconnected, with costs ultimately being dips. Both traditional and e-commercecountrys Zero COVID policies havepassed onto small business owners and retailers will have to continue to reduceplayed a role in bottlenecking Chinasend-consumers. inventory to alleviate this issue, whichdomestic manufacturing and increasing may be a challenge with inflation puttingpressure on its ability to ship goods toBut that doesnt mean they are without pressure on consumers well into 2023.North America.solutions of their own. Finally, the Russian invasion of UkraineLESSONS LEARNED Careful management of stock levels strained the shipping sector. EmbargosThe takeaway from all these develop-on Russian oil increased the cost forments is that while the global shippingwill alleviate stress on warehouse space remaining fuel supplies, and the attackspicture is looking far better than it didand their associated costs. They can on shipping in the Black Sea precipi- at the height of the pandemic, it doesalso temporarily limit the geograph-tated a spike in insurance premiumsnot mean that those businesses relyingical area that goods will be shipped ranging from one per cent to five peron a robust and reliable supply chainand avoid multiple ocean transits until cent of the value of the ship comparedwont be adversely affected. Companiesa more stable supply chain can guar-to pre-war levels of just 0.25 per cent.thatdependone-commerceforantee delivery dates. Reduction in All these factors contribute to shippingdelivery of materials and customer fufil- packaging and the use of more light-delays, which have quadrupled sincement will continue to struggle with an weight materials also provide a marginal March 2022.uncertain outlook.respite when faced with uncertain or high shipping costs. On a brighter note, the combination ofYet there are some hopeful signs. The historic low vacancy rates for warehouseGlobal Supply Chain Pressure Index regis- Clearly, the supply chain challenges space, high inflation and lower consumertered its second lowest levels this pastcompanies faced in 2021/22 are no demands has reduced shipping ratesJanuary since the start of the pandemic,longer the ones they face todayor will across all modes of transportation sincecontributing to a decrease in Korean andface tomorrow. We need to remember the pandemics peak. At the height ofChinese delivery times and a reduction in the pandemic buying bubble, wherethe European backlog. As China containsthat businesses always need to anticipate consumer demand far outpaced supply,their most recent outbreak of COVID-19and plan for the new and unexpected the price of a single 40-foot containerand lifts their Zero-COVID policy, theirroadblocks of the future. Adaptation is reached well over US$20,000. It has nowexport market will ease the constraintskey to the survival of any business, today fallen to just $1,382 for West Coast ports,on goods moving across the Pacific. more than ever.Aboriginal BUSINESS REPORT 55'