This archive report was first published on 13 September 2021.
September 13, 2021 - UPS is bracing for more supply chain problems in 2022, but does not anticipate huge spikes in transport costs, according to Scott Price, the shipping giant's international president.
Price attributed the expected disruptions to low vaccination rates in key developing countries, which will likely lead to additional shortages of raw materials and components similar to those that have plagued industries from automakers to apparel to homebuilders.
"The logistics industry does not see 2022 as having any less disruption in supply chains than in 2021," Price told AFP in an interview.
Price expressed confidence that transport costs could be contained in 2022 after the company enacted a series of surcharges earlier in the pandemic amid skyrocketing demand and higher operating expenses.
UPS spent more on disinfectant, installing plastic dividers in work sites, and covering hotel costs for employees in markets where workers were unable to commute to their homes due to strict government mandates.
"Some of those costs are going away," said Price, who said 2022 shipping rates would be increased by 2.8 percent on average, well below the 10-year average.
Several other companies have also announced supply chain disruptions, including Toyota, which will cut car output by 70,000 units in September and 330,000 in October due to ongoing virus disruptions and a chronic global semiconductor chip shortage.
