OCEAN FREIGHT MARKET UPDATE
Whereas some signs were suggesting an easing trend in the supply chain disruptions, two major events came and reshuffled the cards, that is the war in Ukraine and successive lockdowns in China, both adding to the uncertainty in the container shipping industry.
Considering that the Russian market only represents 5 % of cargo handled by the big shipping companies, many consequences of the war in Ukraine are rather indirect for the container industry. First of all, the conflict has a negative effect on the activity of the ports in the Black Sea and has also resulted in a stoppage of rail freight traffic between Asia and Europe. In addition, it worsens congestion in North Europe ports since about 10 000 Teus bound to Russia are stuck in terminals or inland container stations due to the economic sanctions.
The greatest and most direct impact is the accentuation of the fuel price increase, which had begun in January, and affects both overseas and inland transport, and a rise in the prices of other raw materials which could worsen inflation and knock the householders’ confidence leading to reduced consumption. On the other hand, China has been under lockdowns for 3 weeks – particularly in Shenzhen for a week and now in Shanghai.
Although ports are said to be working normally, productivity has fallen dramatically since there are not enough longshoremen, leading to vessel delays and worsening port congestion. Moreover, most factories are shut in the area and trucking capacity has been reduced by about 30 %.