Insufficient road- rail infrastructure and port capacity will create ‘perfect storm’ – warns GSF

“Lack of sufficient road and rail infrastructure, and insufficient port capacity systems will be key stressors on the global economy, and create the ‘perfect storm’ for shipping;” was the GSF message to industry this week.

Speaking at the Eurocoke Summit in Amsterdam, Chris Welsh Secretary-General of the Global Shippers’ Forum said: “increasing international trade will set unprecedented challenges to the transport system, particularly around ports, in port hinterland distribution and in surface road and rail freight movements.”

Addressing leading global procurement leaders in the world coke, coal and steel industry, on the theme of “exploring Macro Stressors in the logistics sector”, Mr Welsh told delegates:

“The OECD and other international agencies project that trade related international freight will grow by a factor of 4.3 by 2050. Future growth will be driven by changes to production and sourcing and in the geographical composition of trade. The shift is reflected in the fact that nine of the world’s top ten ports are located in Asia with China alone accounting for seven of the top ten ports and of a continuous shift of economic activity to emerging economies.”

Within his presentation – Welsh outlined the ‘geographical shift,’ and highlighted the key stressors on shipping and the economy if there is insufficient road and rail infrastructure, port capacity and systems.

Chris Welsh explained:

“The West Coast of the United States has given a glimpse of a nightmare situation. The ‘perfect storm’ of larger container ships, new maritime alliance configurations, vessel bunching, port congestion, labour disputes and a lack of inland haulage has placed unforeseen consequences on global supply chains and the US economy.”

Welsh continued:

“West Coast port congestion has specifically hit US retailers, suppliers, distributors and agriculture. Some US economic analysts have said that the situation has had a “drag” effect on US GDP, with 12.5% of US GDP flowing through the two main West Coast container ports, costing the US economy billions of dollars.”

GSF called on industry and regulators to work together in order to avoid any future congestion crises; with better scenario planning, and ensuring sufficient supply chain contingency strategies are in place. In addition, GSF would like regulators to ask more searching questions on the impacts of the new mega vessel maritime alliances – in particular with concerns of their impact on international trade.

In conclusion – the GSF Secretary General stated: “with agricultural products rotting at the port, lost contracts and empty shelves, those engaged in the supply chain have a clear responsibility to prevent future breakdowns, and in undertaking some future proofing to finding solutions to further potential problems.”