Nowadays the price of almost everything is going up, and you might have to wait for months to even get it. And pay a premium price for it. Sometimes you might not even get it at all. This global shipping crisis is the result of the Covid pandemic that started almost three years ago now. So much time later now, companies like Four Winds Saudi Arabia are still struggling to operate like before. This situation has revealed the delicate and fragile structure of global freight forwarding and has disrupted it like never before. The question is, is the pandemic still a factor after almost three years? We will clarify it in this article.
Global shipping crisis – how did it start?
The Global shipping crisis started in late 2019 when a new virus wreaked havoc first in china, and then in the whole world. This resulted in closed ports and reduced capacity for months without end. Imagine the size of the congestion that occurs at these ports and how much money did the freight forwarders Bahrain lose because of this? This might not have been so bad if people didn’t try to get their minds off the ongoing crisis by shopping online. This has created a boom in the demand for goods. Why was this a problem when it is usually something good? Because:
- Factories were closed
- Staff either got sick or was too scared to go to work
- Production was slowed down because of the economic crisis
A move from “just in time” manufacturing to “just in case”
Apart from the changes in the Bahrain customs clearance, there was a major change in the way that manufacturers worked. Before the pandemic, companies kept very few components in stock. They did this to reduce wastage and to avoid paying for storage. But once shipping started getting delayed, this had to change. Manufacturing companies started ordering products in bulk, just to make sure that they have enough components in stock. Imagine not being able to produce a whole product because there is one tiny component missing?
Are shipping companies the only ones winning?
Even though Saudi customs clearance has been in chaos since the pandemic started, shipping companies cannot say the same. Even though there has been a huge increase in work for them, they have made a record profit thanks to the increased demand for shipping containers. They have earned so much, that there have been accusations of price gouging. The main victims of these accusations were the three major shipping alliances that control over 80% of the market. The prices for shipping have increased fourfold for a single container, so the accusations have a solid standing point.
Is the pandemic still a factor in the global shipping crisis?
From everything that has been presented, even though almost 3 years have passed, the pandemic is still a huge factor in the global shipping crisis. But the more time passes, the covid pandemic is decreasing its influence. With more time and adaptation techniques, everything will probably go back to normal.