Shippers are facing a crisis in the global container shipping market with shipping rates climbing to record levels, a chronic shortage of ships and containers to meet a surge in demand, and poor reliability of services that are operating.

 

Much of this has arisen from the effects of the Covid-19 pandemic resulting in closure of ports and terminals, and shortages of key workers such as port workers and truck drivers for inland delivery of containers.

 

Impacts on shippers

These factors are combining to create immense pressure on international supply chains, with importers and exporters struggling to find shipping space for containers, especially on services from East Asia to North America and to Europe, at a price that preserves some level of profitability, and that can meet hard delivery deadlines for goods to be available in stores and warehouses for the peak winter holiday season.

 

Impacts on international supply chains

Supply chain delays and disruptions are causing delivery deadlines for goods to be missed, triggering penalty clauses in supply contracts, putting cash flows under strain, particularly in small and medium size businesses (SMEs). Some larger shippers are even chartering their own ships to safeguard their shipments.

 

Impacts on national economies

The effects of the Crisis will be felt in national economies too with delays to shipments of materials and components slowing the recovery of economies from the impacts of restrictions imposed to control the spread of the Covid-19 pandemic. The limited availability of some goods is leading to price increases and adding to inflationary pressures in many economies.

 

What GSF is doing

These are critical times for international trade and the container shipping industry. As the voice of cargo owners in international supply chains GSF is:

• Monitoring developments to understand shippers’ experiences and concerns and help inform their decisions

Access the Container Shipping Market Quarterly Review, produced by MDS Transmodal in partnership with GSF.

• Providing commentary and insight on behalf of shippers to the international news media, helping to link the crisis in container shipping with the likely effects on consumers and businesses.

Read GSF news releases and commentary on the Container Shipping Crisis.

• Articulating a case for reform of the container shipping markets for them to become more flexible and responsive to changing trade patterns and the impact of unexpected events

Explore GSF’s campaign to modernise competition rules in the container shipping industry

 

GSF expects the next few weeks, when flows of goods are normally at their annual maximum ahead of the Christmas and Thanksgiving holidays in Europe and North America, will be unlike any other in recent memory. Expect delays, diversions, disappointments and disagreements.