COVID-19 PANDEMIC HAS NOT BEEN DISASTROUS FOR GLOBAL TRADE

The surprising picture of global consumer trade in containers shows that there been relatively little fluctuation in monthly volumes despite two years of lockdowns and restrictions on economic and community activities. Equally, the sharp rise in freight rates has not been due to volume of trade. A bold statement for sure, yet consider the following:

• Global container trade, according to “Container Trade Statistics” data shows that over the 16 months to November 2021 the monthly average movement was 14.9 million TEU with the exception of the normal February Chinese New Year decline to 13.2 million TEU in February 2021, followed by a sharp recovery.
• North America imports averaged 2.9 million TEU monthly with a 6 per cent drop in February 2021 followed by recovery.
• Europe imports averaged 2.9 million TEU monthly with a 10 per cent decline in February followed by a 17 per cent rise then back to average levels.

Despite the theoretical availability of containership capacity over this time, freight rates exploded to provide carriers with bonanza profits as ships became unavailable due to poor crew vaccination management, Chinese port lockdowns in the battle against Covid-19 and labour shortages in North America and European ports and along the logistics supply chain due to Covid-19 illness. This created the shortages in the retail and industrial sectors that have caused an element of shortages and pressures along the whole of the transportation chain.

Economic indicators are giving us a paradoxical view of the direction of the global economies. Job vacancies are high as are the number of employees quitting jobs in search of better opportunities. At the same time, many workers are currently testing positive, reportedly with up to 10 per cent of workers absent due to covid or isolation.

Despite all the hurdles in the way, the indications are that the major economies are finding their way back to pre-pandemic levels of economic growth suggesting that the new normal may well be to down-play the risk of Covid and focus on ridding all restrictions and living with it. Much of this may be driven by governmental support packages hoping that a sustained recovery will follow. However, with growing political and military tensions between the three super powers the next few months look rocky.