Geneva, 20 November 2021 (TDI): UNCTAD reports COVID-19 Pandemic impact on maritime trade. The United Nations Conference on Trade and Development (UNCTAD) published a report on 18 November.

UNCTAD reports that pandemic still casts unprecedented challenges. There are mounting risks and uncertainties. There are pressures on global supply chains. Moreover, the spikes in rates along with the high prices affect both consumers and importers.

Pandemic Impact

UNCTAD reports that the socio-economic recovery of pandemics depends on sustainable maritime transport as well as on the distribution of COVID-19 vaccines.

“A lasting recovery will depend on the path of the pandemic. moreover, on  being able to mitigate the headwinds and on a worldwide vaccine roll-out,” – UNCTAD Secretary-General

The Secretary-General of UNCTAD, Rebeca Grynspan mentioned that the impact of the COVID-19 pandemic is a challenge for Least developing countries(LDC) along with the small island developing states (SIDS).

UNSC Secretary-General, António Guterres has also repeatedly mentioned that the pandemic has laid social inequalities.

Challenges

UNCTAD mentioned that the pandemic has exposed the existing challenges in the maritime transport industry like labor shortages and infrastructure needs.

The report mentioned that there is a need for urgent actions to resolve these issues. Moreover, some seafarers are stranded at sea due to pandemic restrictions; like lockdown, border closure along the closure of international flights. It has affected the crew replacement and repatriations.

The report also outlined the measures for governments and international organizations.

Logistic Challenges

The challenges in maritime trade are marked as “pandemic-induced logistical challenges”. They are shortages of equipment, less reliable services, and congested seaports.

There are challenges on the supply side as well. The soaring freight rates benefited the shipping lines. Moreover, the surcharges rise even higher due to the grounding of the Ever Given; the huge container ship blocked the Suez Canal in March, this year. Such accidents disrupt global trade.

UNCTAD warned that consumer prices will “significantly increase if the surge in container freight rates continues”.

Monitor Markets

The report highlighted that there is a need to monitor market behavior and ensure transparency when it comes to setting rates.

The report has examined how the pandemic has accelerated “megatrends”. These trends could transform maritime transport. Such as digitalization and automation. Consequently, it could lead to efficiency and cost savings.

The analysis shows that global import price levels increased on average by 11%. It surged to 24 percent for SIDS, as these depend on maritime transport for imports.

If the situation continues, consumer prices could be 1.5% in 2023. The rise is expected to be 7.5% in SIDS. moreover in LDC  2.2%.

Climate Resilience

The shipping industry needs to come up with climate adaptation and resilience. There is an urgent need to decarbonize and find alternative fuels to reduce emissions. As a result, costs will reduce.

UNCTAD’s director of technology and logistics, Shamika N. Sirimanne mentioned there is a need to build resilience and revive the debate over globalization as well as the supply chains of the future.

“By exposing the vulnerabilities of existing supply chains, the COVID-19 disruption has sharpened the need to build resilience and revived the debate over globalization and the supply chains of the future,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics

 

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