The past Covid period of March 2021 till December 2022 has impacted the world trade enormously. Combined with the enormous demand for goods all over the world, the disruption of the global logistic chain is complete.
At first when the pandemic broke out, the world maritime economy put on the brakes. Factories were closed, shipping companies cancelled orders from ships, some ports closed, goods piled up and port authorities postponed investments.
In the fall of 2020, demand picked up again and no one was prepared for the high demand of goods. The infrastructure could not follow. Consequences were a doubling of maritime transit times from Asia, overcrowded terminals, a lack of containers and ships, a feverish search for employees for ports and vessels to keep up with the workload.
The worldwide maritime shipping industry is in regular times a well-oiled machine with just-in-time deliveries, shipping companies that adjust there shipping routes and ship speeds on overview screens in headquarters to allow a perfect timing of flows of goods and minimal stocks. Covid brought such an extra demand that the entire logistic chain is in backlog.
A second impact is a rising of prices everywhere and the higher revenues for container shipping companies. The logistic issues will have an impact on inflation. According to the UN, high container rates only, if they remain so high – will drove global inflation by 1.5 percentage points between now and 2023.
Higher demand of goods means higher flow of distribution and thus higher revenues for the container shipping companies. They are making super profits thanks to high container rates.
According to the consultant Alphaliner the top ten container shipping companies in the world are expected to make a profit of nearly $120 billion in 2021 which is 6 times more than 2020.
The Danish company Maersk being the worlds biggest container ship owner, made a gross benefit of 5.9 billion dollar in the 3rd quarter of 2021 which is a record and almost 5 times higher then the same period last year.
A third impact is the Seafarer’s Welfare. According to the recent Seafarers Happiness Index report, published by The Mission to Seafarers and focused on the experiences of seafarers between July and September 2020, during the ongoing crew change crisis and other work hardships resulting from the efforts to control the Covid 19 pandemic, seafarers continue to feel dismayed and frustrated. Trips are extended beyond their contractual timeframes and they often work 12 hours a day and 7 days a week.
We will keep you updated with the Global Maritime Situation.
We hope you had an interesting read,
Seaman Solutions Team