Covid and its consequences still impacts the supply chain: only 20% of planes are flying, and the capabilities of the cargos are fully booked. Explosion of the pricing of the transportation, obviously leads to delays in the chain, and price raises for the same reasons. This factor is not helping the recovery for
smooth leadtimes.
There are significant capacity constraints affecting the availability of both sea & air freight. Market data shows that air freight demand is close to returning to 2019 levels, but the available capacity is down by 24% due to the lack of passenger flights. Price levels are down from the early pandemic highs of 4-5X pre pandemic rates. However, the price trend is upwards from summer 2020 levels of 1.5X pre pandemic rates and currently sitting at 2-2.5X pre pandemic rates due to very high seasonal demand. They are expected to remain high in 2021 and until a significant increase in passenger air traffic increases available cargo capacity. For sea freight demand is high due to a post pandemic lockdown rebound in demand, leading to two major issues: a shortage of both dry and refrigerated containers, and a high differential in pricing on Asia to Europe / UK and Asia to USA shipping routes. This differential towards more profitable USA routes is driving up prices for container traffic between Asia and Europe/UK, and freight rates to the USA are already very high.
Today more than ever, suppliers that own and control the complete supply chain of PCB materials including laminates, and prepregs from end to end, have a clear advantage. Maintaining carefully managed inventory in various locations worldwide gives the flexibility to adapt to these unforeseen events outside normal control, such as pandemics or industrial accidents! Building a supply chain capable of handling the challenges we all encounter – those we can control and those we cannot – is ultimately dependent on the quality of dialogue between supplier and customer. The more we can work together, and establish those close, strong, and enduring relationships to the benefit of all parties involved, the easier it will be to navigate these challenging times.
