Shipping costs will continue to rise around the world, which means higher prices for consumers, the United Nations Conference on Trade and Development (UNCTAD) warned.
UNCTAD it expects a greater price hike next year, unless solutions are found for supply chain problems that occurred within the repercussions of the Coronavirus pandemic.
The global import prices may rise by 11%, and consumer prices by 1.5% between the current period and 2023, UNCTAD said.
UNCTAD said in the “Review of Maritime Transport 2021” report that “global consumer prices will rise significantly next year until disruptions in shipping supply chains stop and port restrictions and terminal deficiencies are addressed.”
Global supply chains have faced unprecedented demand since the second half of last year, as consumers spent on goods rather than services during the shutdowns due to the Coronavirus.
But the rise in demand has affected many practical constraints, including the carrying capacity of ships
containers, container shortages, labor and congestion in ports as well as COVID-19 restrictions.
According to the report, this led to record prices for container shipping on practically all container trade routes.
“The current surge in freight rates will have a profound impact on trade and undermine socioeconomic recovery, especially in developing countries, until maritime shipping operations return to normal,” said UNCTAD Secretary General Rebeca Grynspan.
“Returning to normal would entail investing in new solutions, including infrastructure, freight technology and digitalization, and trade facilitation measures,” she said.
UNCTAD pointed out that the pandemic has compounded the existing challenges of the industry, especially the shortage of labor and the gaps in the infrastructure.
The organizations revealed the weaknesses such as the closure of the Chinese port of Yantian last May, due to the outbreak of the virus, which caused significant delays, or when the giant container ship “Ever Given” closed the Suez Canal last March, which led to an imbalance in global trade.
The impact of the pandemic on maritime trade volumes last year was less severe than expected, UNCTAD stated.
Maritime trade contracted last year by 3.8% to 10.65 billion tons, while it is expected to increase by 4.3% this year.
UNCTAD noted that the medium-term outlook remains positive, but is subject to “increasing risks and uncertainties”.
The organization expected annual growth to slow to 2.4% between 2022 and 2026, compared to 2.9% over the past two decades.