There are currently several restrictions on international shipping routes that affect global trade. Shipping, a means by which more than 80% of the world’s volume of merchandise is transported, suffers not only from piracy in areas of Asia and Africa, but also from the effects of armed conflicts and low water levels in some places.
Global bottlenecks
Two of the three most important artificial sea lanes in the world are currently not fully navigable: the Suez Canal, in the Middle East, for safety reasons, and the Panama Canal, in Central America, due to a permanent low water level. Each constitutes an important shortcut for maritime transport, shortening routes around Africa and South America and making passage through the dangerous southern extremes of Cape Horn and the Cape of Good Hope unnecessary.
These difficulties were put on the table at the United Nations Conference on Trade and Development (UNCTAD), recently held in Geneva. There it was found that carriers have to take long detours to avoid attacks or to have enough water under the keel, which increases costs and significantly increases the environmental damage caused by ship emissions.
Likewise, the change in routes and the extension of the duration of journeys has altered distribution plans: container shipments arrive later than expected, which puts port operators in trouble, who must organize and plan their installations months in advance. The result is longer waiting times for ships outside ports and delays in delivery dates to customers.
The problems of the shipowners
In statements to Financial TimesJeremy Nixon, director of the Singapore-Japanese container shipping company ONE (Ocean Network Express), maintains that several companies have not been able to meet their schedules, mainly since December, following the attack by Yemen’s Houthi Islamist militants on ships traveling to through the Suez Canal.
Nixon emphasizes that ships arrive at ports on days when they were not scheduled and that some “are already saturated.” He is referring to Shanghai and Dubai, as well as several ports in the Strait of Gibraltar area.
There are not enough ships
Nixon says ONE would typically need 12 vessels to provide uninterrupted service on the Asia-Northern Europe route. However, currently, detours around the Cape of Good Hope require more time, so to keep up would require 16 ships, which his shipping company does not have.
On the other hand, increasing ship speed to reduce time loss is not enough since “globally, there is simply not enough supply of ships available to compensate for longer voyages,” says Nixon.
However, fleets are growing around the world and by 2024 a capacity increase of 8% is expected, compared to 3% currently.
Prices go up
Container prices from Shanghai to Europe rose an average of 256% between December and February due to the conflict in the Middle East.
For Unctad, longer transport routes not only mean increased costs, but also an environmental impact due to higher fuel consumption.
On the Singapore-Rotterdam route, greenhouse gas emissions could skyrocket by 70% on a round trip, which would have “both economic and environmental costs that put additional pressure on developing countries,” says Unctad. .
(aag/ers)