Globalization acted as a blessing for connecting people both on an individual and national level through trade but it also increased economic dependence among them. And now, an incident that occurs in one area of the globe has a ripple effect upon the rest. Since the time Europe turned into the focal point of the Covid-19 spread, every nation has been struggling to keep the economy running.
The recent shipping crisis caused due to the pandemic is not the only one of its types. The world has been witnessing such a crisis for a long time. For instance, the major catastrophic events like the incident of 9/11 and the financial crisis of 2008 affected each industry severely. All parts of the shipping industry have likewise gone through the effects of this emergency leading to severe shipping bottlenecks, delays, and increased prices.
A constant state of crisis in the global shipping industry:
From the panic buying at the beginning of the lockdown to the fall in demand towards the end, the shipping industry has witnessed some dramatic crises. China, being the epicenter of the first wave of the pandemic experienced lockdowns to curb the spread. These lockdowns led to a halt in the shipping and manufacturing lines as most of the companies around the world import raw materials from China.
Later on, the lockdowns in other countries further escalated the shipping crisis as the border closures led to further limitations in global trade. The falls in demand for the products and shortage of labor led people to cancel their shipments.
Now, as the things are getting back to normal, the shipping industry is again in a state of uncertainty and pressure due to a dramatic surge in demand. The different cargo services are all struggling to keep up with the rising demands.
Delays and high prices:
Lockdowns prompted a dramatic drop in retail purchases, trailed by a sharp bounce back as nations began to open up once more. As of now, many container ships are lining for admittance to over-burdened ports, especially in the US and China.
The pandemic along with the recent blockage at the Suez Canal caused delays, resulting in the large queues of ships causing more delays and congestion. It has become common to see containers lined up on quaysides for months and the cost of the containers has reached unexpected marks. Due to the unavailability of containers, the prices of containers and shipping costs have increased as much as ten times.
Entrepreneurs need to change their strategies and choose different delivery techniques in the shipping industry. Likewise, the delays in shipping from China are giving some genuinely necessary help to an oversupplied market.
Sailor abandonment:
The maritime shipping industry is very significant in supporting the versatility of different economies during the current emergency. But during the spread of COVID-19 related limitations, 0.4 million sailors were abandoned adrift. This severely affected the maritime shipping industry and its workers.
Amid the pandemic crisis, air cargo services of various nations kept the economy running. Many big airplane companies turned their passenger planes into cargo planes to deal with the crisis. This helped efficiently manage air cargo services all around the world including the air cargo services in Dubai.
Shortage in shipping containers:
The pandemic started a worldwide boom in certain businesses, increasing demands. But, after conditions started getting normal, there has also been a worldwide container shortage in the shipping industry which has affected the wholesalers handling such businesses.
Shortage of truck drivers:
Furthermore, in many countries, there is also a shortage in the number of truck drivers which is creating hurdles in moving containers to their destinations.
Medium-sized shipping containers:
For quite a long time, container ships have continued to increase in size. The biggest one today can adjust more than twenty thousand containers on a single ship. However, such ships require deep ports and big cranes, which restricts them from many places.
To ward off such a crisis, medium-sized vessels could assist with making supply chains more solid later on. Moreover, cheap labor in some other countries where on one hand benefits the company, on the other hand, can halt all the operations over small incidents.
Conclusion:
The global economy can only be saved if the shipping industry keeps running as it is one of the only ways to connect the global public. The shipping industry is squeaking under the strain of demands. It’s taken the current emergency to feature how shipping contributes to the worldwide economy.
As a result, nations and organizations have become careful about investing their assets in one place and are looking for ways to modify their supply chain structures. It’s critical to keep the movement of products running and the answer to this emergency isn’t to backpedal on globalization as it won’t benefit either the consumer or different governments.
