Post-Covid Scenario of Container Market: Impact of The Scarcity of Empty Shipping Containers Over High Prices of Commodities In the Global Supply Chain Environment
DOI:
https://doi.org/10.58932/MULG0021Keywords:
Container market, container scarcity, global supply chain, maritime supply chain, post COVID scenario, high prices of commoditiesAbstract
Seaborne trade, particularly containerized trade, was expected to suffer a significant decline at the outbreak of the coronavirus of the 2019 (COVID-19) pandemic. Due to the reason that supply chains are obliged to import various items and resources from China to meet consumer demand for commodities such as medical equipment, home office supplies, and computer equipment. As China recovered from months of trade suspension, an imbalance was developed, with the country sending around three containers for every one imported. Furthermore, the container crisis reflects a slowdown and delays in the maritime supply chain because of pandemic-related strains, such as port labor shortages, port congestion (also due to blank sailings), and capacity constraints in the truck and other inland transportation systems. Due to a lack of empty containers, backlog at ports resulted in freight prices surpassing record highs by the end of 2020 and early in 2021. The surge in freight prices was felt in various developing countries, including Africa and Latin America. As a result, shipping and container rates skyrocketed, resulting in prolonged delays for businesses, the total cost of ownership (TOC), and thus the price of commodities. Therefore, this paper emphasizes over repercussions of constraints on the whole maritime supply chain and propose measures for dealing with potential future container shortage.
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