Business

Covid’s Impact on Shipping Industry

Covid-19 has affected lives and the economy globally. The logistics firms and the shipping industry which are responsible for the flow and movements of goods have also been affected directly by the ongoing pandemic. Being an important part of the value chains within the international borders and across the logistic forms are responsible for facilitating commerce and trade as well as help the businesses to transfer the products to the customers.

Upsurge in the price of containers

In March 2021, in Suez Canal, when the mega-ship namely Ever Given had blocked traffic, it helped in triggering the new uprise in the freight rates of containers which had started to ease from the highs it reached during the ongoing pandemic.

The rates of shipping form a primary component of the costs of trade and thus new up price is likely to pose a challenge to the economy of the world which is still struggling to recover from a global crisis.

Jan Hoffmann, who is the chief of the logistics &trade branch of UNCTAD had said, “The Ever Given incident reminded the world just how we rely on shipping.”

The rates of the container have a certain impact on world trade because all the goods that are manufactured like medicines, clothes and more use containers for shipping. 

Mr Hoffman even said that the ripples are about to hit maximum customers. A lot of businesses will not be able to cope up with the higher prices and will be passing them to the customers.

Thus, there has been a huge impact of covid 19 in the logistic prices and shipping industry. The ongoing pandemic had led to changes in the patterns of consumption and shopping, there has been a surge in electronic commerce and also the unavoidable lockdown measures have led to an increase in the demand of imports for consumer goods and a huge part of consumer goods require containers for shipping. The increased demand has been way stronger than the supply of the capacity of shipping which had led to an increase in the prices of the logistics.

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