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We expect transportation bottlenecks to persist well into 2022 with problems existing throughout the supply chain—spanning from port and ship capacity to the ability of logistics networks to deliver goods to their final destination.Container shipping rates are currently around nine times their level relative to June 2020, the lowest value since the start of the pandemic, highlighting coordination problems. Even as ports increase operating hours to ease congestion, absenteeism related to renewed increases in Covid-19 infections may scupper hopes of these pressures abating in the near term.Truck drivers are also in short supply across many countries, so increasing throughput at ports simply overwhelms transport networks further inland. Key to addressing this problem is increasing wages and improving working conditions to attract more job applicants.Warehouses are bursting at the seams across many countries in the wake of the sudden shift to online purchases, but new construction is robust. Demand-side pressures for warehousing facilities are likely to persist in the near-term, but as consumer spending continues to rotate away from goods to services, these pressures will ease. However, the Omicron Covid-19 variant risks pushing this spending rotation further into the future.Water transport in the US is set to regain its pre-pandemic level in H2 2023. However, a stronger performance at the port of Rotterdam means we see a recovery in ocean transport in the Netherlands over the second quarter in 2022.As a result of the transport and logistics challenges, sequential momentum in industrial activity will remain muted, but a pickup later in the year will boost 2023 prospects.
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