Just over half of freight forwarders, traders and shippers believe 2022’s fast-approaching peak shipping season will be more challenging than what’s been described as the “chaotic” peak season of 2021.

That’s according to a new survey from Container xChange, a Germany-headquartered technology company that offers a container trading and leasing platform, among other solutions.

The xChange Industry Pulse Survey found that 51% of freight forwarders, traders and shippers expect the peak summer shipping season to be “worse” than last year. Meanwhile, another 22% anticipate the level of “chaos” will be the same as 2021. More than a quarter (26%) expect things to go more smoothly this year.

The year’s most active time for shipping product from manufacturing centers in Asia and elsewhere to western markets like North America and Europe typically occurs in the late second quarter through third quarter as retailers and others, including promotional products suppliers, build up stock in anticipation of the busy fourth-quarter holiday shopping season.

Last year, cargo surges during that period resulted in record container shipping freight rates, delivery delays, port congestion and unreliability from container shipping services.

The cargo surge occurred as importers scrambled to get product into stateside warehouses and onto shelves to meet rampant demand amid a robust bounce-back in consumer and corporate spending following COVID-depressed lows. In the promo products space specifically, issues included inventory replenishment delays that led to stock shortfalls.

After middling improvements in late 2021 and early 2022, supply chain imbroglios flared again as COVID-driven lockdowns in China and Russia’s war in Ukraine disrupted global networks.

According to Container xChange, 58% of survey respondents said that the COVID lockdowns in China have made it “hard to produce/ship as much product as planned.” That suggests that cargo backlogs and unsatisfied demand are building as China’s zero-COVID strategy limits exports to Europe and the U.S.

China's manufacturing sector is in contraction and new data shows the slowdown worsened in April amid COVID-driven societal shutdowns. That has implications for the #promoproducts industry's supply chains and inventory https://t.co/33d6rH5UMS @asicentral @ASI_MBell

— Chris Ruvo (@ChrisR_ASI) May 2, 2022

Should China ease or lift restrictions, as is reportedly starting to happen to a limited degree in the key manufacturing and export center of Shanghai, there could be a crush of importing demand from the West as importers work feverishly to get product in advance of Q4 and before other potential lockdowns in China.

In that, soaring freight rates, delays and port congestion could ignite and exacerbate. Li & Fung, a supply chain management company, reported in mid-May that the easing of some restrictions in Shanghai has enabled what it described as 70% of “major enterprises” there to resume production.

Resumption of activity is a good thing, of course, in that more product is getting made again. And, so far, reports indicate there has not been intensified heavy stress on shipping. Indeed, the lull in activity in China resulting from shutdowns has reportedly contributed, in the short term, to a reduction of port congestion at U.S. ports. It has also helped reduce freight rates from highs seen earlier this year, but prices were starting to climb again and remained about double what they were the same time a year ago, according to analysts like the Freightos Baltic Index.

But how will things be in a couple months? Christian Roeloffs, co-founder and CEO of Container xChange, said that it’s harder than normal to predict just how the peak shipping season will go as there are many “contradictory signs and intangibles.”

“One big question is whether China is going to sacrifice its zero COVID-19 policy to get trade and its economy moving again,” Roeloffs said.  “If it does, then there’s every sign that we’ll see a substantial surge as backlogs of exports are shipped. If lockdown rules are relaxed soon and truckers are allowed to get back to work, then those backlogs will be arriving at the same time as peak season orders, which could cause a lot of supply chain blockages at ports in Europe and the U.S. where congestion is already widespread. However, there are very few indicators so far that President Xi is willing to compromise health policy to boost trade.”

Another factor that could impact the degree of supply line disruption experienced is end-buyer demand. Roeloffs noted that various GDP forecasts, purchasing managers indexes, soaring inflation and declining consumer confidence indicate there could be a drop-off in spending. “That could help offset any sudden rush of cargo from China, especially when there are also signs that consumers are spending more on services instead of products,” Roeloffs said. Of course, a drop in demand amid a difficult economy could also mean reduced sales for everyone from retailers to promo products distributors.

Importers are concerned that just-started contract talks involving West Coast dockworkers could lead to slowdowns or stoppages at ports that worsen supply chain disruption https://t.co/NEW0DCgQtl @asicentral @ASI_MBell #promoproducts @Tim_Andrews_ASI

— Chris Ruvo (@ChrisR_ASI) May 12, 2022

The concern and uncertainty over peak season shipping comes as promo suppliers and importers from across industries keep an eye on just-started contract negotiations involving unionized West Coast port workers.

There’s concern that potential contentiousness in the talks, which center on a new contract for longshoremen and warehouse workers, could intensify supply chain issues. A West Coast port worker strike during the peak shipping season could be disastrous for U.S. importers, especially if the feared massive influx of cargo were to occur.

Still, there’s optimism surrounding the talks so far.

“We’ve got seasoned professionals on both sides of the table,” Gene Seroka, chief executive of the Port of Los Angeles, said this week. “And each side knows how important these 29 West Coast ports are to the American economy. History has shown us that these negotiations will go past the expiration date of the current contract. But both the dockworkers and the employers will be out there moving America’s business.”

Jing Rong, vice president of global supply chain and compliance at Top 40 supplier HPG (asi/61966), also believes work will continue at the ports during the talks.

“I don’t believe there will be a widespread port shutdown,” said Rong. “Given the current inflation and supply chain issues, I think both sides are going to have much more room and willingness to negotiate an acceptable outcome.”