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Wine exporters need to prepare for continued logistics pressure in 2022

By Vitisphere November 05, 2021
Wine exporters need to prepare for continued logistics pressure in 2022
“Exporters need to plan ahead, lengthen their lead times and factor transportation into the transaction”, explains Clément Desbois. - crédit photo : J.F. Hillebrand

ldquo;Shipping now has a cost and it has to be planned”. Clément Desbois, export director for the transport company JF Hillebrand France, does not beat about the bush. Stressing the paradigm shift the wine industry is facing, he points out how essential it has become to take on board logistics issues. International container transportation has been disrupted since the start of the pandemic, and it remains challenging, with lengthy delays and sky-rocketing costs.

And Desbois does not expect to see any improvements in 2022, which will do nothing to reassure exporters. “Demand visibly is still very strong, with a 13% increase in demand for containers at the end of September 2021 compared to 2020, and +6% compared to 2019. All of the world's container transport capacity is being used”, he stresses, explaining that the blockages are being caused by congestion in the ports. Saturated port infrastructures are increasing delays for containers with a knock-on effect across the entire logistics chain, due to a lack of stock.

Schedules are no longer reliable because only 30% of ships are on time. There is a lot of disruption”, admits Desbois, who says that 12% of the world's container capacity is unusable because of the chain reaction caused by delays. The global congestion is causing prices to soar. For a 40-foot Dry container, the global maritime freight index is $10,000 (€8,600), which is a tenfold increase in its average price in two years, according to JF Hillebrand. Depending on the route, prices vary. For example, a container shipped from Europe to the United States costs $7,000 compared to $2,000 in the summer of 2020.

The lack of space is fuelling price increases”, sums up Desbois, confirming that international traffic will not return to normal before 2023. This is due both to sustained demand for manufactured goods in 2021-2022 linked to global economic growth and the arrival of new ships in 2023, which were ordered by shipping companies at the end of 2020.

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