The most important “swans” are, in no particular order: • The risk of a strike by the ILA port workers on the US East Coast. • A strike among Canadian railroad workers. • Escalation strike action in European ports, where the past month has seen short-term strike actions. • A strike on the Canadian West Coast by ILWU port workers directed at DP World terminals. • An escalation of the Red Sea conflict by the Houthis, who over the past month have become better at hitting the vessels they are targeting. • Hezbollah in Lebanon following through on its threat to attack ports and airports in Cyprus. • Worsening port congestion in Asia. In a normal market environment, strikes are common and usually have at worst, a local impact – such as the 40-vessel pileup outside Los Angeles and Long Beach in 2015 due to labor action. However, the market is not normal, and hence any of these actions will have a much larger impact than usual as there is simply no surplus capacity in system to deal with these issues. Shippers therefore have a choice: move the product early and risk seeing freight rates drop if none of the risks come to fruition, or assume that surely it cannot get any worse, only to see one of these risks come through and cause the market to worsen even more. Given that many got burned by using the second choice in spring 2021, it is no wonder that more are now moving on to the first option. DSV – Global Transport and Logistics We provide and manage supply chain solutions for thousands of companies every day – from the small family run business to the large global corporation. Our reach is global, yet our presence is local and close to our customers. Around 75,000 employees in more than 80 countries work passionately to deliver great customer experiences and high-quality services. Read more at www.dsv.com
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