We are experiencing an international logistics crisis due to multiple factors, most of them related to the pandemic.
The first factor is the limited space available to transport goods due to container shortages, which has caused freight prices to triple in recent months compared to a year ago.
What is the container shortage?
This doesn’t mean containers don’t physically exist – we’re actually referring to them not being where they should be. Since the pandemic began, ships arrived at ports worldwide with cargo containers that couldn’t be reloaded with new products due to COVID restrictions, leaving many sitting idle.
The second factor in this crisis involves maritime traffic flow. Typhoon season and temporary post-pandemic closures led several Chinese ports to cancel operations and work below normal capacity.
This change has been drastic, considering about 80% of goods consumed worldwide are transported by sea. We’re talking about a direct impact on household inflation.
However, there’s a third factor: major producers like India and China are manufacturing less due to strict measures to prevent new waves of the virus.
How will this crisis continue?
It’s still unclear how long this problem may last. With Christmas approaching, we can conclude it will be very difficult to meet demand, and in the long term prices will likely continue rising if the pandemic persists and maritime traffic doesn’t improve.
While this situation may not show a very encouraging outlook, at Framex we believe there are more positive factors that provide sufficient reasons to face these challenges.
We see opportunities in crises – so if you want to import or export, contact us!
At Framex, we take your business further!
