A shortage of ships for years to come is the latest problem that could lead to a continuation of the global shipping crisis.
Although orders for new ships are on the up, these will take years to come on stream. In the meantime, shipping companies are also faced with replacing ageing vessels that are past their scrappage dates.
The situation is further exacerbated by a decline on the number of ship yards globally to build the new vessels, according to a report in the FT.
Record ship orders
A record number of ships have been ordered in 2021, with the capacity to carry 3.2 million 20 feet containers, the equivalent of 20% of the current global fleet.
Stricter environmental controls over shipping are also thought to be making shipping companies nervous about ordering new ships. New rules on energy efficiency kick in from 2023 but orders for liquefied natural gas (LNG) powered ships have not risen since 2019.
Some environmentalists say LNG does not go far enough to cut emissions and propose other fuels as ammonia or hydrogen.
Consumers still spending
According to a report in The Loadstar, high consumer spending is not likely to decrease soon to ease the shipping crisis.
Despite recent reports from the WTO and the US National Retail Federation (NRF) indicating a softening of growth, consumer spending remains resilient, said NRF chief economist Jack Kleinhenz.
“Recent price increases brought on by constraints in the supply chain have not dampened the robust demand seen during the past year. If retailers could find more inventory, they could sell it,” he said.
All modes affected
Pressure on freight capacity and inflated prices will remain in the immediate future, reports Lloyds Loading List.
It quotes Scan Global Logistics’ (SGL) latest Market Outlook Advisory that unprecedented volatility and Covid outbreaks are affecting all modes of transport. It points to the differential between sea and air freight being at a historic low due to inflated shipping costs.