Is Container Shipping Under Pressure?

The world has just begun to come out of the pandemic, and each and every industry’s business throughout the world has been affected like never before. The logistics companies in India are also not untouched by the fact that they have made significant losses in the last two years, but have also experienced unprecedented market conditions.

The shipping industry is so huge that it’s practically not possible to run the industry smoothly without fail. Not to forget, the natural calamities, which are under no one's control, also hinder the process. Apart from not being able to maintain clear communication at all the points, juggling with the inefficient infrastructure and coping with the delayed deliveries, the pandemic brought with itself a new set of complications which need to be dealt with.

Is Contanier Shipping really under pressure? Has the post pandemic situation been in favour of the industry? What are the new challenges in container shipping for Indian logistics companies today? Let’s decode.

• Shift in consumer behaviour:At the beginning of the pandemic, countries started going under lockdown and exports were drastically reduced. As people adjusted to the new normal, they demanded more consumer goods (electronic items, gym equipment, etc.) rather than service goods, which ultimately resulted in increased production and therefore more transportation. Asia, the biggest centre for the production of consumer goods, saw a spike in transportation. 

• Manpower Shortage:Most of the port workers got infected with COVID-19. And as precautionary measures, the ports were operated with 50% manpower, which was followed by reduced cargo handling speed and later by congested ports.

• Congested Ports: Containers after containers were sent to the US West Coast to meet the increasing needs of the people. But with the ports partially functioning, the process of offloading and onloading became time-consuming. The congestion, which started on the West Coast, has started to take its toll on the East Coast and European ports as well  Recently, a lockdown was announced in China, and congestion at Chinese ports increased in March and April.

• Container Shortage:Due to a shortage of experienced haulage drivers, the empty containers, which usually took 1-2 days to return to the port from the destination, now take 10–12 days. This increased empty container circulation caused increased ocean freight and a shortage in the number of containers available.

•  The six-day-long closure of the Suez Canal exacerbated the situation.

• Final Thoughts:

  Though the shipping community was hopeful to see pre-pandemic figures in 2022, the course of events since the beginning of the year has increased the likelihood that supply chain disruptions and schedule instability will continue this year too.

  Container shipping charges have increased drastically due to the awful rise in fuel prices, and the congestion at the ports remains a global issue.