Shipping Rate Growth Poses Threat To Global Economy Recovery: UNCTAD

A boom in the rates of container shipping has posed a threat to the recovery of global economy, with small countries depending on deliveries by sea probable to be hardest hit by a rise in import prices, United Nations agency UNCTAD mentioned on Thursday.

Shipping Rate Growth Poses Threat To Global Economy Recovery: UNCTAD
Representational Image | Courtesy: StormGeo

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Major bottlenecks around the world have been created owing to a surge in demand for consumer goods during the pandemic, therefore impacting the supply of container ships and boxes to transport cargo.

Shipping and port officials expect disruptions in global supply chain to extend into 2022.

“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,” stated UNCTAD Secretary General Rebeca Grynspan.

“Current surge in container freight rates, if sustained, could increase global import price levels by 11% and consumer price levels by 1.5% between now and 2023,” said UNCTAD in its Review of Maritime Transport for 2021.

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“The impact is expected to be more significant for smaller economies that depend heavily on imported goods for much of their consumption needs,” it noted.

UNCTAD said: “Maritime supply chain stakeholders including container lines, ports, inland transport providers, customs and shippers should work together to share information and make maritime transport more efficient.”

“In the face of these cost pressures and lasting market disruption, it is increasingly important to monitor market behavior and ensure transparency when it comes to setting rates, fees and surcharges,” it added.

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