Pandemic on Logistics and Shipping 2020/2021

Just to share: apart from the excerpts from our management herein, we have included some quotes from our regular U.S.A. partners with regard to the situations created by the pandemic.

In addition to regular shipments, we are also pleased to share some of the ongoing and previous small projects that we are handling.

Three constraints on freight capacity

Since the start of the pandemic, the supply of freight carriage has been hampered by three main situations, all stemming from a lack of workers, both ship crew and porters:

• Not as many vessels are put back into service
• Lack of ship crew due to testing and safe distancing
• Lack of port workers due to testing and safe distancing, notwithstanding those placed on SHN / quarantine or who tested positive

The effect on rates

In view of the above, and apart from ship supply shortages, vessels are held back for a long time at most of the base ports around the world. In turn, freight rates have been increasing gradually on a monthly basis at a rate of about 10% to 20%.

For example, the average freight cost to Australia or the U.S.A. reached 400% higher than pre-Covid levels.

The China export surge

Situations were made worse during Q1 2021 because of the huge surge in China exports. They imported 1 container but exported 2, a ratio of 1:2. Setting aside the trade dispute with the U.S.A., their position has since improved and become more balanced with regard to tangible trade differences: importing 2 containers and exporting about 3, a ratio of 2:3.

Looking forward

In the light of current virus developments, with Covid-19 having evolved into various variants, not many of us think these situations will simply go away. However, let us hope it will subside. Even so, it will not be the same as pre-Covid levels: things will get more expensive in times to come, probably starting from consumables through to capital products.