Many things are affecting global trade. Starting from supply shortages to other pandemic-related issues. That could affect the global market negatively. However, if you are fully aware of these issues, you might do something to prevent it. Making a positive change is all that matters these days especially in the field of the global market. Therefore, make sure you listen carefully to our advice. Additionally, you will learn how is the global container shortage affecting global trade. Our national shipping company of Saudi Arabia will help you understand these topics a bit better.
How did the global container shortage happen?
Not only did the global container storage happen, but it also made the global trade situation very difficult. Freight shipping is one of the most common ways of transporting goods. However, now it faces an unpleasant situation. Due to the ongoing pandemic, many events occurred that influenced the usual ways of shipping and transporting. Considering that this is a state of crisis, situations such as container shortage didn’t come as much of a surprise. That led to the disturbance of supply chains as well as the state of agitation on the global market.
Believe it or not, many of the containers used for shipping are in inland depots. Some are piled up in cargo ports which makes it difficult to do anything with them. On the other hand, some containers are onboard vessels. This led to the biggest and the most inconvenient container shortage in Asia and Europe. Both these continents are now facing huge losses due to this. This could be understood as some sort of a domino effect due to its influence on global trade. If you plan on shipping to Saudi Arabia, you better learn some of this first.
Can we control the way global container shortage affects global trade?
There have been many supply chain disruptions this year but this one is particularly nasty. Since the beginning of the pandemic, many countries started implementing lockdowns, which led to the freezing of economic growth. Some global international companies closed their business temporarily, which caused containers to be stopped at ports. However, certain carriers wanted to stabilize the costs in order to stop the pandemic from taking its economic toll. That brought the reduction of the number of vessels in the sea. This stopped the process of further transport and left many containers empty without the ability to be picked up. The situation negatively affected everyone but Asian traders felt the discomfort the most.
Is global container shortage affecting global trade and how?
To continue, after all that damage that affected trades, another scenario developed. That eventually led to a global container shortage affecting global trade. In this spiral of events, most of the containers were sent to Europe and North America but haven’t headed back soon enough. Additionally, many people lost their jobs due to this pandemic. That affected ports as well as cargo depots everywhere. Since there is not enough staff to control and direct containers, they were left to pile up at ports. Although technology can help logistic companies through crisis, this is not the case.
According to a World Container Index, the rates have pinned from 2000 American dollars up to 4500 per 40 feet container. There is huge pressure to transfer all the containers back to Asia. Thanks to the ongoing situation, Asia to the US and Asia to Oceania rates became very lucrative. Therefore, all the carriers don’t even wait for cargo before sending containers back to Asia.
When talking about the production of new containers, the situation isn’t much better there as well. It came to the swift in the production since many companies wanted to create something more lucrative. So, if you want to know how global container shortage is affecting global trade, now you know it. It’s very bad. However, the situation might change soon. We will follow how things go on the market. Everything will eventually get back to normal.
What is the current global trade situation?
We should explain how the current global situation functions. That is because we want to provide a bigger picture of this particular situation. The statistics say that the volume of world merchandise trade will probably rise to 8% after being 5.3% last year. Even though the pandemic took its toll economically, it will not destroy the global trade situation.
Still, some believe that the trade growth will slow down a bit. This means that the next year will be a bit unsatisfying. The effects of the pandemic show long after the pandemic ends. Therefore, we could face some unpleasant surprises on the economic plan globally. However, we will name some of the issues that affect the trade market that aren’t related to COVID-19. Here are they:
- Lack of leadership
- State Capitalism
- Economic Warfare
- Power distribution
- Fluctuations of Natural Resources
How can you manage in this market without losing profit?
Despite the fact that global container shortage is affecting global trade, we should try to look on the bright side. You can focus on some smart moves that will help you save profit in these unfortunate times. Here is actually what you can consider:
- Make a thorough strategy and a business plan
- Have your solid customer base
- Always analyze the data
- Be flexible during your work
- Do your best to maximize the profit
These circumstances oblige you to think outside of the box. If you play your moves smart, you will be able to not only save money but also make a profit. That is not an easy thing to do these days.
Get ready to ship like a pro
After you learned how is global container shortage affecting global trade, it’s time to think smart. It’s always a good idea to check global container shipping statistics. It will help you orient better and understand your next move. Contact us should you need any additional information. We will gladly address the issue with you.