Why can’t global shipping companies solve shipping crisis at the time of pandemic?
Solutions and problems for prediction, adopted from Chris Baraniuk , Technology of Business Reporter (BBC NWES) September 14, 2021.
The current global container shipping services industry is severely challenged by the COVID-19 pandemic aftermath effects as equally worst as the lockdown. Though, the impacts are different, the latter breezed shipping while the former resulted in busiest and most expensive shipping. The Ethiopian Shipping and Logistics Services Enterprise (ESLSE) is currently striving to provide sustained sea transport services at the time of shipping crises due to the global COVID - 19 pandemic. Cognizant of the challenges in current world shipping scenario, it has made various measures to help the steady and continuous flow of cargoes moving from various global ports to various destinations. Apart from stabilizing markets by adjusting the price fairly to move container cargoes, providing wavers and acquiring about 6 to 10 thousands of containers through purchase, it is trying to fill gaps of services provision caused by container shortages. The efforts of ESLSE are commendable, for it is striving to cope up problems that giant companies are also staggering by. Here we highlight even why global giant shipping companies cannot solve the problems let alone ESLSE. We provide major points adopting an article by Chris Baraniuk, reporter of Technology of Business (BBC). The article is written on September 14, 2021.
Let alone ESLSE, why even giant ships can’t solve the shipping crises,
- Keeping steady supply at this time is facing problems.
Suppliers give 10 to 12 months for supply- this is very stressful. The pandemic has created a boom for some products for example bike, masks and house hold accommodations - Increasing demand is creating increasing “shortage of containers”. Components and spares must be availed to make booming products as per their demand (charity or donation).
Ports are working flat out to try to resolve supply chain hold-ups- there are many logistical headaches. Lock down led to a massive drop in retail purchases, followed by a sharp rebound as countries started to open up again. At present hundreds of container ships are queuing for access to overloaded ports. Mostly in the US and China. In addition, in Europe and the US, long driver shortages mean harder to move containers on their destinations once on land. Port closures caused by covid-19 out breaks have further exacerbated the traffic jam picture. It has become common to hear stories about containers left idling on quaysides for months. Plus, prices for containers are through the roof. Sending one 40ft container from Asia to Europe costs $17,500 (12,650 euro) more than 10 times the price of a year ago. According to George Griffiths, editor of Global Container markets at S&P Global Platt’s, some shipping companies are now charging premium rates to guarantee delivery within a few weeks. For example, Importers are also attempting to outbid one another, offering extra cash to snap up containers over their rivals. It is really starting to bite in the market says Mr.Grifiths.
Impact of the crisis
: - The current situation is creating big questions. Is the current situation just a momentary supply chain blip or a sign that the great behemoth of container & shipping can no longer keep pace with our changing world. The container shipping industry is creaking under the strain of high demand at the moment (Rose, George author of Ninety Percent of Everything, a book about a shipping industry). The current crisis is highlighting how crucial shipping industry is to the global economy. “It has always been absolutely vital, it has never been noticed (Rose adds) Picture).
Measures taken to alleviate problems
: - The steel box is changing the global trade recently; some big businesses have even decided to purchase their own containers and charter ships independently in response to shortages. (Among them include the US giant, Wal-Mart and Horne Depot and the Sweden furniture brand Ikea are taking these measures). Companies are chartering vessels to tackle a product shortage (for example Ikea) Companies have bought additional containers and chartered vessels in order to redress a product shortage. Ikea spokeswoman confirmed, Ikea sent goods by train from China to Europe and invested in temporary intermediary warehouses in China, Vietnam, India, Indonesia and Thailand to support production.
More Problems Foreseen
: - A gut feeling that we are going to see empty shelves at Christmas at the Covid-19 pandemic moment. (Stavros, Karamperidis, Head of the Maritime Transport research group at university of Plymouth.)
Sever lorry driver’s shortage at UK due to EU workers leaving the UK following Brexit, the pandemic and tax charges making it more expensive work and to be employed in UK.
Shipping firms are expected to make record profits this year, to the turn of many billions of dollars, but continue to be beset by problems.
Concepcion Bon Arias, a spokeswoman for Maersk, says, we have deployed more vessels and containers than prior to the pandemic, yet we still see unfortunate delays leading to missed sailings and missed capacity.
Delays in ports are having knock-on effects on ships schedules .A couple of day hold up at one port can end up adding two weeks to a container ships total journey time. The current pressures are creating awkward situations such as empty containers piling up at some ports while becoming scare in others.
Uncertainty over how best to meet new regulations on shipping industry emissions, expected in 2050, also means that some companies are wary of expanding their fleets at present. It is a very costly mistake if you order 10 big container ships that might cost you $100-200in apiece if come 2050, you cannot use them .The largest ship in the world today can hold 24,000TEUs to be packed on a single vessel. But such ships require large deep ports and giant carinas which limits where they can go. Business may also have to re think their reliance on global supply chains that brings parts or products from single factories half way round the world .The shipping crises has really pointed out the riskiness of these kinds of business strategy.
I implication for Ethiopian shipping and logistics services enterprise (ESLSE)
Ethiopia is one of the sovereign countries in the world and that has its own shipping enterprise with its national flag. The country takes its share from the global shipping crisis that is threatening even the survival of big shipping companies. Therefore, it needs to pay attention to the problems caused by the pandemic and be part of a global solution as mentioned above very meticulously.
Ethiopian shipping and logistics services enterprise need to be aware of the global shipping crisis and take appropriate measures to solve problems before they are getting worth. Therefore, the enterprises corporate customers must hopefully trust the enterprise that takes commendable global solutions. They should have patience for mutual revival of efficient and effective shipping services to the standard. The enterprise is always alert to follow the current global shipping scenario for appropriate solutions.