Sea Freight Significantly Affected by the Pandemic

maritime transport is significantly affected by the pandemic
maritime transport is significantly affected by the pandemic

Maritime transport, which plays a pioneering and important role in the globalization of trade, is an extremely important mode of transport in terms of transporting goods with large volumes, low unit price and time sensitivity. Maritime transport, which has the largest share in the transport of world trade, is significantly affected by the course of the global pandemic.

Although maritime transport played a savior role in this period, serious decreases were experienced in the volumes of cargo transported due to stagnating production and decreasing consumption demands. With the decrease in cargo volumes, shipowners had to leave the chartered ships and use only their own ships. This meant that the number of ships making voyages decreased. At the same time, with the accumulation of containers in some areas, it became very difficult to find equipment. As a result, there is currently a great demand for containers for export and available space on ships to load these containers.

The drop in cargo volumes caused by the pandemic and the imbalance in world trade has caused carriers to cancel some of their services and flights, increasing delays, flight cancellations have been announced. There was a 20-30 percent decrease in the demand for container transportation. Due to the decreasing number of containers, the ships started to make their voyages before they could fill their capacity. This situation caused the ship lines to suffer financial loss, and therefore the number of ships and voyages was reduced. As a result of all these developments, the supply chain was disrupted. With the dissipation of the panic atmosphere in the summer months, trade revived again, but this time it became difficult to find both the ship and the equipment to carry the cargo due to the reduced voyages.

Due to the deterioration of the trade balance between the USA, China and Asian countries and the operational problems in the USA, a significant part of the containers circulating in the world was piled up in North America. At the same time, with the shipowners reducing the number of sailing ships, the reintegration of the containers accumulated in America into the world trade and circulation slowed down.

Due to the pandemic measures in the countries, container handling operations slowed down and there were delays in ship voyages. The ship timetable announced by the shipowners could not be complied with. According to the Sea–Intelligence report, in November 2020, 50 percent of the ships did not arrive at the destination port at the scheduled time. Even after the equipment arrived in the receiving country, the delivery time of the door and the return of the empty container to the port were extended. In order to avoid the container shortage and to collect the equipment faster, shipowners have reduced the free time and detention periods all over the world. This has caused many traders to increase their cost of loss due to demurrage costs on a global scale. Container manufacturers in China are constantly producing containers, but a significant portion of these containers are put into circulation to replace the old ones. Therefore, there is no quick solution to the perceived container shortage.

In this difficult process, the biggest evolution of the seaway started to be experienced in the field of digitalization. We see that traditional documents and procedures that have been used for a long time can change with digitalization. Digitization will bridge the gap between global maritime trade stakeholders in paperwork, ship and cargo tracking, including bills of lading. As UTIKAD, we have been supporting this transformation for a long time. We continue our efforts to create a digital platform that will include relevant stakeholders. In the coming period, we will continue to talk about our digitalization initiatives, and we will continue to encourage both our members and stakeholders on every platform.

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UTİKAD Chairman of the Board
Maritime Trade Magazine June 2021

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