Supply and sales firms in the UK are being urged to prepare for “no let up” in the already strained global supply chain, as Omicron brings “even more challenges.” A perfect storm with imperfect timing.
Freight specialists Norman Global Logistics has warned that shippers hoping for supply chain normality next year “may be disappointed,” as Omicron, Brexit customs changes, and warehouse capacity limits impact the sector.
With travel routes closing, oil prices rising, and haulage driver shortages widening, the international shipping firm advised customers “a lot depends on the potency of the new variant.”
“Global supply chains have been under intense and sustained pressure for close on two years, with every likelihood of no let up until well into 2022, and now the Omicron variant may pose even more challenges,” said director Martin Rue.
“The amount of available warehouse space has fallen to the lowest level since commercial property agents started tracking such data back in 2009, with the Financial Times warning that the UK could run out of warehouse space within a year.”
The company noted that if the new variant impacts on air freight capacity, and lockdowns prompt continued spending on goods over services, demand could remain unsustainably high for sea freight capacity and warehouse space.
Processing those goods through UK customs could also prove increasingly fraught, as new customs declarations become mandatory for EU shipments as of 1 January 2022.
Commenting on the upcoming requirements, Norman added that “there are indications that many firms in the UK and EU are not ready for the January deadline.”
Unsurprisingly, suppliers and sales groups are already feeling the impact of the compounded issues, with Electrocoin’s John Stergides stating “prices are going up so fast and equipment is in short supply, we have had to introduce first order first take delivery, as delays are coming fast.”