After 18 months of turmoil due to the Covid-19 pandemic, conflicts and congestion of the Suez Canal, global logistics is showing signs of recovery, reducing supply chain pressure.

According to data from international freight company Freightos, the average cost of shipping a standard 40-foot metal box around the world is down about 45% from the peak recorded last fall.

The number of ships waiting to enter the port of Los Angeles (USA) also decreased by 75% compared to the beginning of the year. The first six months of 2022 are also the busiest and busiest times for this port in a century.

Air freight times are also said to be improving by the Flexport supply chain. The Federal Reserve Bank of New York's global supply chain stress index is down 57% in July from when the index peaked.

Global supply chain recovers (Illustration image)

According to S&P Global's latest monthly survey of purchasing managers, businesses from major economies have confirmed that the delivery time of inputs and materials in July has eased.

Surveys conducted by the European Commission also show that shortages of raw materials and equipment are no longer a production constraint for manufacturers based in these continents.

Joanna Konings, senior economist at ING Bank, said supply chain pressures can be so severe that it forces businesses to stop production. Product shortages mean prices skyrocket. Ms. Konings said: “The goods are now circulating again. The international trading system is also recovering, dynamic and showing positive signs of recovery.

Recently, according to a Philadelphia survey, more than 40% of participating US manufacturers expect an improvement in delivery times in the next 6 months. Experts say that the current logistics and supply chain market stability amid political turmoil can be a good thing for the world economy.

However, this trend reflects a decline in demand for goods due to high inflation. The increase in transportation and material costs in 2021 also contributed to a significant decrease in purchasing power.

In addition, during the peak shopping season at the end of the year, logistics and supply chains may once again face the risk of congestion. Josh Brazil, Vice President of Project44- A data platform said: “Transportation providers may not be able to handle if the volume of goods suddenly increases again.”

Project44 vice president added: "The delay is likely to return in the last months of the year if there is no preparation."