Mitridat / News/Reporting for ICTV: Pandemic's impact on international transport, container shortag, Suez Canal situation

12.04.2021

Reporting for ICTV: Pandemic’s impact on international transport, container shortag, Suez Canal situation

On April 11, 2021 the expert of the logistics company “Mitridat”, deputy director, Natalia Gonchar (Koval) made a statement for the TV Show “Facts of the week” on the ICTV channel. The story was about a massive prices increase in Ukraine, and Natalia Gonchar stated that the main reason was in the international shipping troubles.

It is obvious that the coronavirus has had a definite impact on the international shipping market. The global pandemic caused the decrease in cargo traffic and in the number of international shippings, there is a constant shortage of feeder ships, a lack of available containers and the freight rates keep increasing. At the beginning of 2020, the demand for raw materials and goods from China decreased and that is why shipping lines started to cancel trips and to reduce the capacity of ships. However, by the third quarter of last year, the market revived, and China considerably increased the export to the USA and Europe, although the number of return shipments to China was too small. That caused the lack of container space and delays in deliveries. Clearly, that was the reason the freight rates started to increase rapidly which could not but affect the final cost of goods. This is exactly what we have been witnessing in stores over the past few months. The Suez Canal blockage also had an impact on the delivery terms, and on the container space availability and of course caused an additional short-term cost of transportation increase. However, within a month the situation is expected to return to normal and hopefully it will not have a global affect on the container shipping market. It is not possible to predict what is going to happen, but given the resumption of cargo flows and shipping of unfilled containers to China, the gradual rates reduction and some kind of normalizing of container traffic can be expected soon.