Tight shipping capacity and high freight rates will continue to dog the global market this year as there is still no end in sight to the impact of the Covid-19 pandemic on the world’s supply chains, said the top executive of China International Marine Containers (Group) (CIMC), the world’s largest supplier of shipping containers by production volume. Mai Boliang, Chairman of Shenzhen, Guangdong province-based CIMC, said that the company has benefited from its booming container manufacturing business, with operating profit soaring 81% year-on-year to CNY13.47 billion in 2021. The container order book remained full in the first and second quarters of this year. Industry experts predict that the twin impacts of the pandemic and geopolitical tensions will reduce the operations of global ports and inland transportation this year.
Global container capacity will be tighter as many containers remain empty on the return leg of their journeys after delivering cargo, which has been affecting the efficiency of container turnover. The container market will remain tight due to poor container availability in many countries this year, said Dong Liwan, Professor of Shipping Management at the Shanghai Maritime University.
Given the complexities of the pandemic situation abroad, severe congestion and delays could lead to a decline in the efficiency of the entire supply chain. But, blindly increasing transportation capacity and container supply will not really solve these problems, Dong warned. A study by the Beijing-based China Council for the Promotion of International Trade (CCPIT) found that although many parties, including government branches, export-oriented manufacturers and shipping container suppliers, had all intensified their efforts to resolve the tight container supply and meet the demand for containers from China’s exporters in 2021, tight transportation capacity and high freight rates remain unresolved issues. Therefore, it is vital for the government to promote cross-border logistics cooperation under regional trade pacts such as the Regional Comprehensive Economic Partnership (RCEP) and support capable companies to build overseas warehouses, said Zhou Zhicheng, Researcher at the Beijing-based China Federation of Logistics and Purchasing (CFLP), the China Daily reports.
