Many countries may find it difficult to return to normal growth after the Covid-19 pandemic and accompanying lockdowns as long as the overheated container market continues, says Global Shippers’ Forum (GSF) in a new report published in collaboration with MDS Transmodal.
The container market is strained by huge demand on goods from Asia to the US and Northern Europe in particular, which has generated a shortage of ships and equipment, such as containers, and pushed rates to unprecedented levels. Further, the lack of capacity causes delays and queues off several ports, a scenario that has been criticized several times by shippers.
“Shippers around the world are in a state of shock at the collapse of service performance and the remorseless rise in shipping rates. The latest data confirms the anecdotal experiences of shippers struggling to book container slots on a fleet that has hardly grown and needing to absorb the relentless rise in rates that is eroding their own profit margins,” says James Hookham, general secretary at Global Shippers’ Forum, in the announcement.
The upturn in the container market could continue for a number of years, according to a previous assessment from Lars Jensen at Vespucci Maritime in a webinar hosted by shipper DSV.
“Right now, we’re looking at 4-6 months before there’s a realistic chance of operations returning to normal. But this requires that the world acts somewhat normal, and that’s not the case,” Jensen said in the beginning of May.
The great demand co-occurs with container carriers absorbing the extra capacity that has been in the market in recent years and acted as a buffer against bottlenecks, he added.
At GSF, James Hookham points out that more unpredictable costs and service levels are required for global trade to recover in the wake of the extensive Covid-19 lockdowns.
“Right now, the double whammy of inflation pressures and chronic shortages of essential products could disrupt the hoped-for resumption of business as normal,” he says in the announcement.
English Edit: L. N. Barnes
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