The president of the shipping association says the global supply chain is past its worst, but not all problems have been resolved.
“There’s still volatility, but overall, I think the worst is over,” Esben Poulsson, president of the International Shipping Division, told CNBC on November 23.
Poulsson explains that retailers have placed a significant amount of orders in advance. This could help alleviate commodity shortages. Besides, new container ships under construction will help increase capacity in the next 24 to 36 months.
Global trade has rebounded strongly after the decline in the first months of the year because of the Covid-19 pandemic.
Freight rates skyrocketed as shipping companies, logistics providers and ports struggled to keep up with rising commercial volumes. Meanwhile, a resurgence of the Covid-19 pandemic in some parts of Asia earlier this year threatened the supply of goods, from electronics and auto parts to coffee and clothing.
The global container freight rate index (WCI) of Drewry, a marine research and consulting firm, shows global freight rates down 0.5%, at $9,146 per 40-foot container for the week. November 18, 2021 compared to a week earlier. But this rate is still 238% higher than the same period last year.
Mr. Poulsson said, the transport industry still has some unresolved issues. Among them are the difficulty of replacing sailors and the slow progress of vaccinating crew members.
Many countries continue to impose travel restrictions to limit the spread of Covid-19. This makes it difficult for sailors to navigate between boats, their workplace and the countries in which they reside.
Travel is even more difficult as sailors’ opportunities to access Covid-19 vaccines are limited, while many countries require travelers to be fully vaccinated.
More sailors are now vaccinated, Poulsson said, and this has improved the situation. According to a report by the nonprofit Global Maritime Forum, the proportion of seafarers being vaccinated increased from 31% in October to 41% in November.
However, the problem is not completely gone. Poulsson explains that his organization has urged governments to consider sailors as “key workers”. As a result, more people will be given priority to vaccinate. But many countries have failed to do this.
“Despite some changes and improvements, the problem is not over and will not go away until governments do their part,” Poulsson said.
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