The container ship MSC Regulus, operated by Mediterranean Shipping Co. (MSC), on the left, the container ship Monte Verde, operated by Hamburg Sud, in the center, and the container ship OOCL Germany, operated by Orient Overseas Container Line Ltd ., moored at Port of Felixstowe Ltd., a subsidiary of CK Hutchison Holdings Ltd., in Felixstowe, UK on Thursday, June 24, 2021.
Chris Ratcliffe | Bloomberg | Getty Images
The worst is over for global supply chains, but all the problems facing the shipping industry have not gone away, said the president of a shipping association.
“There may still be fluctuations, but overall I think the worst is over,” Esben Poulsson, president of the International Chamber of Shipping, told CNBC’s “Squawk Box Asia” Tuesday.
Poulsson said retailers have made a “significant level” of pre-orders, which should help alleviate merchandise shortages. In addition, new container ships are being built and will increase existing capacity over the next 24 to 36 months, he said.
Global trade has rebounded strongly after collapsing in the early months of the Covid-19 pandemic.
Freight rates have skyrocketed as shipping lines, logistics service providers and ports struggled to keep up with the surge in trade volume, while Covid resurgences in parts of Asia early of the year threatened the supply of electronics and automotive products, including coffee and clothing.
The Global Container Index compiled by Drewry, a marine research and consultancy firm, showed that global freight rates fell 0.5% to $ 9,146 per 40-foot container during the week of November 18 compared to a week ago. But the rates remained 238% higher than the same week last year.
Difficulties in crew changes
The shipping industry still has lingering problems, Poulsson said. This includes the difficulties of crew changes and the slow progress in vaccinating seafarers, he said.
Many countries have continued to impose travel restrictions to curb the spread of Covid. This hampered the ability of some seafarers to travel between ships – their place of work – and their countries of residence.
Such a situation has been made worse by the limited access of seafarers to Covid vaccines at a time when many countries are requiring travelers to be fully vaccinated.
Poulsson said more sailors have been vaccinated, which offers “some improvement” to the situation. A report from the nonprofit Global Maritime Forum said the proportion of seafarers who have been vaccinated rose from 31% in October to 41% this month.
But “this problem has not gone away,” Poulsson said. He explained that his organization had urged governments to designate seafarers as “key workers” so more people can be prioritized for immunization – but many countries have failed to do so.
“Although there have been changes and improvements, the problem has not gone away and will not go away until governments properly fulfill their obligations,” he said.