Maersk released its May European Market Update, and the major supply chain company says that despite disruptions from labor actions, natural disasters and COVID’s lingering effects, the ports of Europe are moving steadily along and prepared.
The biggest disruptions in European ports right now are coming from strike actions in France, the ongoing closure of the Port of Iskenderun, which has been closed since the earthquake in February, and the last of the COVID precautions. Though the union’s actions in France is hard to predict and in flux, Maersk says Iskenderun is improving and COVID’s effects have reduced to such a degree that the report said “Demand on Asia–Europe trade has picked up during March, indicating further growth on the import side throughout Q2 and a return to normal peak seasonality in the summer.”
It’s not just in Europe that things are getting better, either. In its recent Asia Pacific report, Maersk said that supply chains in that region are stabilizing and finding equilibrium. Most ports are running at full capacity for inter-Asian routes, the company said, and intercontinental supply chains are picking up or expected to pick up.
It’s not all rosy, however. Maersk said that volatility and inflation issues remain a concern for the Asia-Pacific region, and port congestion, also a concern for several Mediterranean ports, did slightly increase in March.
Globally, Maersk said that the Purchasing Managers’ Index (PMI) suggests that growth momentum is improving, if only slightly, over the first half of the year. Manufacturing is driving the growth, according to the PMI, thanks to China continuing to reopen and energy prices falling.
In the United States, the headline inflation rate has peaked at 5 percent, and the report says they expect that consumer purchasing will grow as a result, and the European headline inflation rate has also peaked. Despite the potential positives of the headline inflation numbers, core inflation is at record highs across both regions, and it is unclear when or how it will recede.
These factors are keeping the global supply chain and manufacturing industries cautious and conservative, so volumes are lean and supply is being carefully monitored. The expected economic downturn seems to be holding off for now, but everyone expected it and is waiting with bated breath.
Here’s hoping we hold fast and weather a milder than expected storm.
