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Breakbulk June 2021

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4 The Journal of Commerce | June 2021 Editorial June 2021 Janet Nodar Breakbulk and Project Cargo Executive Editor, The Journal of Commerce and JOC Events: Chris Brooks 609 649 2181, Executive Editor, The Journal of Commerce and Mark Szakonyi 202 872 1234, Managing Editor: Benjamin Meyer 916 716 6272, Managing Editor: Kevin Saville, 212 488 4282, Senior Editors: William B. Cassidy Trucking and Domestic Transportation 202 872 1228, Bill Mongelluzzo, West Coast 562 428 5999, Eric Johnson, Technology 213 444 9326, Janet Nodar, Breakbulk and Heavy Li 251 473 2742, Greg Knowler, Europe +44 7976798770, Ari Ashe, Southeast Ports, Intermodal Rail 202 548 7895, Associate Editor, Northeast and Gulf: Michael Angell, 646 505 4712 Senior Contributor: Cathy Morrow Roberson, 732 730 2533, Data Analyst: Marcin Lejk , +44 58 741 6270, Shipper Engagement Manager: Dustin Braden, 646 679 3450, Shipper Engagement Manager, Breakbulk: Diana Hamm, 832 499 7368 Senior Editor, Special Projects: Alessandra Gregory Barrett, 860 248 5238 Associate Editor, Special Projects: Emily DeVoti, Senior Designer: Sue Abt, Associate Production Manager: Kate Binder, 603 346 4680, Designer: Hannah Kidd, +44 203 253 2134, Sales: Cindy Cronin, Director APAC sales, 954 260 6061 Jean Gibbons, Senior Sales Executive West Coast, FL, GA sales, 706 469 7160 John Knowles, Senior Sales Executive EMEA, AU sales, +44 777 997 4677 Allyson Marek, Senior Sales Executive Northeast sales, 862 754 8012 Judy Welp, Senior Sales Executive Midwest, Gulf, Latin America sales, +1 512 284 2878 Nicole Hutchison, Senior Sales Executive VA, SC, NC, Canada sales, +1 240 626 6126 For Magazine Subscription Customer Service: 450 West 33rd St., 5th Floor, New York, N.Y. 10001 Vice President, Maritime & Trade, IHS Markit, Peter Tirschwell Manager, Production, Carmen Verenna Product Manager, JOC, Stephen Lyman ©2021 The Journal of Commerce — All Rights Reserved For more information, visit our website, when it comes to infl ation," Wael- broeck-Rocha told the conference audience. "We do not see it as a likely scenario beyond 2021." Current price pressures will likely disappear over the coming quarters, she said. "We will see slightly higher infl ation going forward, but not a long-term price super-cycle. Supply disruptions will lose their force. Countries that are able to increase production will do so," she said. However, there is potential for infl ation in service-sector prices, Waelbroeck-Rocha said. "We will see commodity price infl ation being replaced by service price infl ation in the near term," she said, adding that if this lasts beyond 2022, it will likely to be due to wage increases. The underlying reality is that the global economy is still dominated by the COVID-19 pandemic, Waelbro- eck-Rocha cautioned. With individual economies and businesses reopen- ing, "people seem to think that the pandemic is over, and we won't see any more waves, while at the same time no country has achieved full immunity," she said. Meanwhile, it's "game day" for project logistics practitioners, as Frank Schroeder, director of corporate supply chain and trade compliance at engineering, procurement, and construction (EPC) fi rm McDermott, put it during the conference. Dealing with the current chaos is "what we've been training for," he said. "We're all in the fi re together: our service providers, our project teams.… We can make or break a project," added Brittany Smith, head of logistics for glob- al procurement, Americas, with Linde Engineering, an industrial gas manufac- turer and supplier. "The teamwork has been excellent and the support we've gotten, the collaboration and partner- ships; it's been really good to see." Despite the stress, "this is a probably a great time to be in supply chain," said Pascal Ochquee, director of global logistics for oil fi eld services and equipment provider Hallibur- ton. "I see a lot of people around the industry being very helpful, getting very creative." l THE VOLATILE MARKET of 2021 is snarl- ing project supply logistics from all directions, especially for shippers. As discussed at length during the virtual JOC Breakbulk and Project Cargo Conference in late May, in this con- gested, high-demand shipping mar- ket, carriers are fl exing pricing power they haven't possessed in a decade or longer, while shippers scramble to rework budgets, rethink shipping modes, and adjust procurement strat- egies and project schedules. It's not just about freight rates and a chaotic supply chain. An asynchronous global recovery from the COVID-19 pandemic, with developed countries beginning to re-open their economies ahead of harder-hit regions, has also dramatically driven up material costs, Elizabeth Waelbroeck-Rocha, chief in- ternational economist with IHS Markit, said during the conference. IHS Markit is the parent company of The Journal of Commerce. As of mid-May, prices for most industrial materials had surged as much as 40 percent past early 2021 levels, Waelbroeck-Rocha said. This huge jump is related to supply and distribution problems, rather than a lack of suœ cient production capacity to meet increased demand. The input shortages for companies and upward pressure on prices should abate as the global recovery becomes more bal- anced, but just when that will happen — late 2021? early 2022? — is diœ cult to predict, she said. High commodity prices combined with supply chain challenges "are feeding the infl ation fears we have heard a lot about in the past month," Waelbroeck-Rocha said. "There is a low risk that we are entering a signifi cant danger zone Game day "We're all in the fire together: our service providers, our project teams…. We can make or break a project."

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