While the full effects of the war in Ukraine are still unfolding as we reported last week, Covid remains the greatest disruptor of international trade and shipping. In Australia, as well as the Asia Pacific region in general, the last year has severely impacted freight movements by both air and sea and there is a lot of catching up to do in 2022.
Air cargo was hit particularly hard, with Australia’s $125bn airfreight trade figures being slashed by a third during Covid, according to a report by Infrastructure Partnerships Australia. Hardest hit by the reduction in belly space on aircraft, were producers of high-value meats, fruit and vegetables and dairy bound for Asian markets.
Overall exports of those goods slumped 35% compared to the previous year. Importers also had difficulties, as their overall volume fell 16%. Some airfreight rates are said to have risen to 13 times the pre-pandemic rates.
The Global Shippers Forum (GSF) recently released their findings of the most recent GSF MDS Transmodal Container Shipping Market Quarterly Review. It says that ports lost over a third of their expected capacity to ship containers during 2021, creating delays and serious disruption for exporters, importers and freight forwarders. ‘Lost Capacity’ is a measure of the total number of container ship slots that were expected to be available at the port but did not materialise because the port was skipped, or the entire service was blanked by the shipping line.
In the Asia Pacific, the picture reported showed significant levels of capacity lost with Port Klang (Malaysia) suffering a 40% shortfall and Melbourne (Australia) and Tauranga (New Zealand) down by around a third of the expected container capacity during the second half of 2021. Many of these events were undoubtedly caused by extreme weather conditions and local port congestion – including effects of industrial action and, in particular, the extent of the COVID-19 Pandemic.
“Skipped port calls have multiple effects on shippers,” observed James Hookham, GSF Director. “They create local upward pressure on shipping rates, as shipping line agents ‘auction-off’ available slots on the vessels that do call. Shippers also face unexpected surcharges for the handling and storage of delayed containers.”
One trend is on a more positive trajectory, according to a report from Al Jazeera. Notwithstanding COVID-19 restrictions and supply chain disruptions, overall trade in the Asia Pacific region grew faster than the global average last year, said the Asian Development Bank (ADB) in an interview with AJ. Trade among economies in the region alone rebounded just over 31% over the period, after a 3.1% contraction in 2020, the Manila-based development bank said. ADB Chief Economist Albert Park said the figures provided encouraging signs of a “resilient recovery” from COVID-19.
For more information about international trade and shipping, contact us here at Colless Young. As licensed Customs Brokers and International Freight Forwarders, we handle all your transport needs. We are based in Brisbane and offer a complete range of logistics services, for both airfreight and sea cargo, import and export – including fumigation, warehousing and trucking – through all Australian ports and airports.
