If you were wondering will the Skyrocketing Shipping Demand End Soon? We here at Four Winds Saudi Arabia would like to answer this question for you. This will include a short lesson in economics, but we’ve simplified it as much as we could. So let’s not waste time and let’s start the economics class!
Shipping demand and the pandemic
Did you know that over 80 % of all goods traded in the world are transported by ships overseas? Well, imagine stopping that because in 2020 when the pandemic began that happened. There have been many ups and downs since the pandemic started and it was a major problem in the world economy overall. The coronavirus disrupted supply networks from Shenzhen to Hamburg to New York. So what do you think is one of the reasons why Skyrocketing Shipping Demand increased? If you remember, many trucks and ships were stuck at the border due to health restrictions. After that, there was a problem with vaccines because of different producers. During long lockdowns, repressed needs from massive stimulus initiatives overloaded supply networks. In addition to generating delays in transporting items to clients, the expense of doing so increased.
So what happened because of all of this? Well you maybe won’t like the answer but it is what it is, the prices increased 7 times during last year and a half. When it comes to commodities the prices grew even more. If you ask the world economists there is yet to come even greater inflation, and that means that the prices will grow even more. There is yet simple formula for this. So, when inflation is increased by 0.7 % it means that the prices of cargo have doubled. If you want you can check freight forwarders in Bahrain to see what happened with their prices. Now we can see on the news that there is a new pandemic (probably) coming; MonkeyPox. So if you were asking when will the skyrocketing shipping demand end? We’ll if we look at the data not soon.
Shipping demands and an end of military operation
Now if we forget for a bit about the old and probably new pandemic, we have to talk about Ukraine and Russia. As you’ve probably seen the war is real and it’s been almost three months now. So the problem with this war is that it just added oil to the fire, which is good only for inflation. One more reason why skyrocketing shipping demand won’t end soon is that there will be many more sanctions against Russia. So what does that have to do with skyrocketing demands? Well, a lot of parts, petrochemicals, gas, etc are made in Russia, that’s what a lof people aren’t aware of. Now Saudi customs clearance is very simple and fast; it still accepts Russian ships, which is good, so some of the parts can come to consumers. There is an increasing demand for wheat right now.
As we can see the conflict isn’t stopping. Two sides are fighting each other and the west is heavily supporting Ukraine. It means that this is going to be a long fight, even if it gets over quickly consequences will be here to stay. Just like after every other war. Inflation will probably be much higher and the prices as we can see of everything will go up since the war is spiking the inflation and with a new pandemic on the rise, oh boy. This is going to be one long year. But for now, Bahrain customs clearance still accepts all ships and all vehicles so they seem like a nice option. Even if there is skyrocketing shipping demand our custom papers will never be late.
Rising demand for semiconductors
We’ve already mentioned some of the things that pushed the expenses of the current market and demand up. Those were:
- Covid-19 Pandemic
- Conflict in Ukraine
- Rising inflation
- Semiconductors crisis
Now if you are someone working in E-commerce or are connected with shipping or machines. You’ve probably noticed even if you aren’t working in this industry microchips and semiconductor prices are sky-high. Soaring metal and energy prices, pandemic-related supply chain concerns, and a persisting semiconductor chip scarcity have all hurt the car manufacturing sector. Because of the conflict in Ukraine, car companies are seeking alternate sources of critical materials such as electrical wire, aluminum, and nickel. But this isn’t all there is a shipping container crisis that started in early 2020 when the Covid-19 pandemic began.
After all the numbers, sanctions, pandemics, and statistics, what do you expect? Well, it isn’t going well as you can see. Inflation is higher and the ongoing conflict in Ukraine is making things worse. So if you ask us will the skyrocketing shipping demand end soon? We don’t think so, at least many economists don’t agree. One thing is for sure and that is that nobody knows for real when will all of this end. We were told that the pandemic will end in the summer of 2020, after the vaccination, now we can see Shanghai is closed for 2 months. After all of that war in Ukraine started or special military operation, however, nobody knows when will this end. On top of all of that monkeypox, the pandemic is just around the corner.
To sum it up, nobody knows but until the end of 2023, inflation and skyrocketing skipping demands won’t end soon. That is for sure. We hope that we helped you with all of this. Think positively and stay safe.