Worst is over in global supply chain disruptions: Shipping association
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Left, MSC Regulus, a container ship operated by Mediterranean Shipping Co. MSC, center, Monte Verde, operated in Hamburg Sud by Hamburg Sud and OOCL Germany, both operated by Orient Overseas Container Line Ltd. on Thursday, June 24, 2020.
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Although global supply chains are at their worst, the chief of a shipping organization said that not all the problems facing shipping have been solved.
Esben Poulsson of the International Chamber of Shipping said that there may be “swings” but “the worst is over.” He spoke to CNBC’s “Squawk Box Asia” Tuesday.
Poulsson stated that pre-orders had been made by retailers at a significant level, which should ease supply shortages. He also stated that new containers are currently being constructed and will increase existing capacity over the next 24-36 months.
After a period of decline in global trade during the Covid-19 pandemic, the market rebounded quickly.
The rise in volume of trade meant that freight costs rose as logistics companies, ports, and shipping firms struggled with increasing volumes. Additionally, earlier this year, Covid resurgences in Asia threatened to derail the supply of all goods, from apparel to electronics to auto parts and even coffee.
It World Container Index compiled by DrewryAccording to, an international maritime research and consultancy firm, global freight rates fell 0.5% to $9,146 for a 40-foot container during the week of November 18. This is compared with one week ago. The rates, however, remained 238% above the previous week.
Crew changes can be difficult
Poulsson said that the shipping industry has many lingering issues. Poulsson said that this includes difficulties with crew change and slow progress in vaccination seafarers.
Travel restrictions have been imposed by many countries to stop Covid spreading. This has been a success. impeded the ability of some seafarers to travel between ships — their workplace — and their countries of residence.
This was compounded by the fact that seafarers had limited access to Covid vaccinations, at a time in which many countries required travelers to have full vaccines.
Poulsson stated that more seafarers were vaccinated which is “some improvement”. The report of the Global Maritime Forum, a non-profit organization, stated that the proportion of seafarers who have been vaccinatedThis month, it rose to 41% from 31% in Oct.
Poulsson said that “this problem still exists”. Poulsson explained how his group has been encouraging governments to designate seafarers as “key workers” so that more could be prioritized for vaccination — but many countries have failed to do so.
“Although some changes have occurred and there has been some improvement, the problem still persists and won’t go away until governments meet their obligations,” he stated.
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