Covid impacts on the supply chain

Falvey Cargo Updates

Update: Continuing COVID Impacts on the Supply Chain

Posted: April 29, 2021 in:

With infection rates on the decline and vaccinations being mass produced at superspeed worldwide, many in the cargo industry are hopeful that COVID-19’s hold on our economy is easing up. It’s certainly a brighter picture than a year ago when transportation and trade faced major slowdowns and an unknown future.


While the industry has adapted and survived, continuing impacts on the supply chain are still inhibiting the efficient movement of goods. These are some of the most significant challenges currently:


Port Delays

The e-commerce boom that started at the outset of the pandemic has not eased, leading to sharp increases in shipping traffic. This traffic cannot be accommodated at ports, which are still operating at lowered levels due to COVID-19 outbreaks among longshore workers, adding significant delays to goods coming into the U.S. increasing cargo spoilage and temperature sensitive cargo exposure. The delays at the Port of L.A. and Long Beach have been widely reported, and port officials and retailers see this congestion lasting for months. Ocean freight has become a bottleneck, forcing many manufacturers and retailers to switch to air cargo in an attempt to solve this issue. 


Piracy Increases

The port congestion adds another ripple effect in the supply chain: increased piracy. There’s been a rise in both off- and on-shore ship attacks, which correlates with vessels having to re-route to alternative lanes that have higher exposure to piracy.  Following the high-profile Ever Given becoming stuck in the Suez, there was an increase in vessels that chose (or were forced) to sail around Africa, via the Cape of Good Hope that is known for increased risk of piracy, as well as a climate crisis that makes for unsuitable sailing conditions. Additionally, the International Maritime Bureau has already recorded multiple piracy incidents just a few months into 2021.

Container Shortages

Another major factor affecting the supply chain is there are not enough containers. The labor deficit at ports has led to delays in unloading cargo and returning empty containers to vessels, so a significant number of containers aren’t becoming available as quickly as usual. Additionally, an increased number of containers are needed to accommodate the surge in imports. Purchased goods are sitting and waiting for container space, and every box available is in use.


Protect Your Cargo

Industry experts predict that the global pandemic will continue to disturb the supply chain for months, if not the remainder of the year. Loss of market, loss of use, and delay are all typical exclusions in a Cargo policy.  There are coverage solutions, such as spoilage and trade disruption, that may be available to assist.  Assess the risks to your supply chain and be sure your cargo policy has the coverage you need to protect your business from these unprecedented challenges. 

If you have questions about how you can adapt or tailor your cargo insurance for COVID-19’s impacts, contact us.


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