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Ocean freight has not been spared from the coronavirus outbreak. The market is more complex and unpredictable than ever before due to a lack of capacity, increased prices, and the digitization of transportation businesses. Production was already running at full capacity by the last quarter of 2020, and container shipping orders had also spiked. Transport capacity, on the other hand, was significantly lower than the previous year. The coronavirus shutdown resulted in a lack of empty containers at Asian production facilities, as well as a reduction in timetables and therefore freight capacity.
Container shortages are impacting exports to the United States, as well as shipments to Europe. This is because empty container returns from the United States take at least six to 10 days longer than they did before the Coronavirus. Covid-19 limitations in port terminals, a truck driver scarcity, and delays in unloading cargo are all contributing factors, as diseased ship personnel are routinely quarantined, forcing ships to wait at anchor.
Moreover, many ships are temporarily discharged in order to equip their motors with catalytic converters that reduce emissions. All of this leads to a shortage of cargo capacity and a "astronomic" price increase due to the divergence in demand and supply. It is assumed that through the end of February, possibly during the whole first quarter of 2021, this will be the case. The Chinese New Year, which falls in February, will exacerbate the issue. Given that shipping quantities are not projected to drop until the end of February 2021, rates are likely to climb much more, or at the very least not fall.
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Following that, and once the significant backlog has been cleared, we may see difficulties with shipping capacity, and ideally container availability, begin to improve. However, it will be some time until the available capacity and rate structure revert to pre-pandemic levels. Many European shipping businesses are pouring their energy towards digitizing their workflow. If we want to extend and future-proof the FCL business model, we must examine and adapt our existing procurement and booking procedures to this new market development.
There is hope at the end of the tunnel for the globe, thanks to the approved vaccine against Covid-19, whose research has gone on for decades. The emergency deployment of immunising jabs produced by Moderna, Pfizer/BioNTech, and AstraZeneca/the University of Oxford, with new cases and mortality rates from the pandemic still frighteningly high in many places, can't come fast enough. With three vaccinations on the market and a slew of others in clinical trials, most of the focus has shifted to the logistical hurdles that must be overcome in order to provide doses to those who need them.
In addition to offering significant benefits in cold-chain preservation and speedier time-to-market, air freight has so far been the preferred method of vaccine distribution because of capacity constraints and the growth in the number of vaccines that can be shipped in conventional refrigerated units. Here, we look at the major concerns surrounding shipping's involvement in the next vaccination deployment.