Global Cargo Traffic Jam Could Last Into 2022, Freight CEO Warns
A cargo traffic jam on the world’s roads, seas and air corridors could easily continue into next year, continuing to increase shipping costs, according to the head of one of the biggest US freight brokers.
“The domestic freight markets are extremely dislocated and the global air-freight and ocean markets have tremendous amounts of constraints around them,” said Bob Biesterfeld, chief executive officer of C.H. Robinson Worldwide Inc. “We could be standing up a pretty strong freight market throughout 2021, if not into 2022.”
That promises a windfall for truckers, air-freight companies and maritime shipping lines. Retailers, manufacturers and anyone else who pays to get goods across the globe will get pinched.
As a broker, contracting with carriers on behalf of shipping customers, C.H. Robinson can get squeezed when long-term contracts don’t keep pace with spot costs but adjust as new contracts are negotiated. The Eden Prairie, Minnesota-based company projects an adjusted operating margin of 40 percent for its North America Surface Transportation unit this year, improved from about 33 percent last year.
Annual contracts for long-haul trucking will probably rise in the low-double-digit percentages this year, driven by spot rates that have jumped 35 percent from a year ago, Biesterfeld said in an interview. Air-freight prices have almost doubled from a year ago.
