Crisis in maritime transport

Usually, the focus of attention is usually placed on land freight transport, on issues that are up to date such as the lack of carriers, traffic restrictions in cities, the digitization of the sector, among other aspects. However, a crisis is occurring in maritime transport and it is currently in the spotlight because of the great collapse of one of the key pieces of the most important supply chain worldwide, since 80% of international trade depends on this means.

However, how did it come to this point of crisis in the ports? How is it going to affect the supply chain? If you want to learn more about the crisis in shipping, you have to take a look at the following points that make it up:

Shanghai port collapse

One of the world's most important ports, the port of Shanghai, has suffered a considerable hold-up of cargo ships, which is already greatly affecting certain supply chains such as the technological ones that focus on tablets and screens. Its main cause is the resurgence of covid-19 which has led to strict confinements in several residential apartments and limited the work of millions of inhabitants, including factories.

In this situation of the shipping crisis, if raw materials are increasing in price due to inflation because of the pandemic stoppage, the cost of these same materials along with their transportation could increase much more. It should be noted that prices may increase particularly in the technology and appliance sector, in addition to the fact that these products will run out and take longer to be replenished due to delays. 

Sustainability rate

Cargo ships are known to be one of the main culprits of the greenhouse effect that is already threatening climate change. Several entities are already thinking about how to tackle this problem in the face of the decarbonization of maritime transport and one of the solutions proposed is the application of the "emissions market".

Undoubtedly, such a decision may cause a misuse of the same tax because companies would choose to "flee" European ports and resort to other international ports without this type of restrictions. If this is the case, the main objective of reducing emissions would end up being in vain and other ways of applying sustainable taxes should be considered. In addition, the current crisis in maritime transport would delay the implementation of this type of measures.

Tracking in shipping containers

Knowing the current logistics landscape, one can understand the recent importance of the transportation sector in general to implement tracking systems to ensure and keep track of successful deliveries. Likewise, shipping is no exception when it comes to digitizing tracking, however, there is one decision that is going to change the industry in a big way.

Hapag-Lloyd has been among the first to integrate its own IoT tracking system in its containers in order to stop relying on third parties and have full control of the goods. This may cause other competing shipping lines to start adding the same digital structure and, as a consequence, these companies will have to start offering other interesting services for them.

Container price inflation

As we have seen in recent months, the inflation of raw materials has additionally caused the price increase of the services related to them. Therefore, the cost of maritime transport has also increased, especially in 2021, when its amount for transporting container was 4 times higher than pre-pandemic, predicting a crisis in maritime transport since last year.

However, a small decrease in price has been observed, even though it is still unfeasible for some companies. Despite this, the major shipping lines have been able to raise a lot of money and it has led them to take action to move away from reliance on third party services and digitize their tracking on their own.

Conclusion

The current outlook for the crisis in maritime transport does not seem to be very optimistic given the current circumstances such as shortages, inflation and the slowness to adapt to sustainability rates. What remains is that it will be necessary to gradually get used to the changes that maritime transport is undergoing.

At Hedyla we apply digitized services such as tracking systems for ground transportation that can be combined with other services or with the ERP itself.