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International Forwarding Association Blog » News » Global Trade Struggling Due to a Confluence of Events
Global Trade Struggling

Global Trade Struggling Due to a Confluence of Events

A series of events is driving global trade to a breaking point, from cyber threats at major South African ports to natural disasters in Germany and China and a new wave of Covid-19 and cases rising worldwide. According to shipping experts, economists, and businesses, the effect is an interrupted flow of consumer goods, parts, and raw materials.

The Delta Variant

The new Delta variant of Covid-19 has already plagued parts of Asia, forcing many states to restrict land access for seafarers. Some 100,000 sailors are currently stranded onboard as captains are unable to rotate crews. Industry insiders warn that we are already amidst a chew change crisis rather than facing the prospects of one. As sea vessels move up to 90 percent of global trade, the second crew change crisis has already disrupted the supply of all sorts of commodities, from electronics and food to iron ore and oil. Experts note that the current situation is extremely challenging across sectors and is expected to last until the end of 2021. The problems are many, from shortage of empty containers and tight ship capacity to a complicated operational situation at some terminals and ports. Industry experts warn that international freight services are already behind schedule as businesses are struggling to free cargo stacked up in the US and Asia as a result of these series of events.

 

international freight services

 

Natural Disasters

Floods in strong economies like Germany and China have caused further supply chain disruptions, with trillions of dollars of commodities already compromised. The flooding in China has nearly halted the shipping of coal from mining sites like Shanxi and Inner Mongolia at a time when factories need more fuel to satisfy rising summer demand.

The transport of cargo has slowed considerably in Germany as the disaster struck in mid-July. Late shipments increased by 15 percent compared to the previous week, slowing down plant operations. Floodwaters caused by the recent torrential rain partially closed Rhine River and killed 157 people in Germany. The rise in water levels has made passing under bridges extremely challenging and unsafe, preventing ships from sailing to ports in Switzerland. Luckily, water levels began to fall after a weekend of dry weather, making it possible for ships to sail in the northern parts of Rhine from Mannheim to Duisburg. Rhine River is a major shipping route for a number of commodities, including animal feed, grain, heating oil, coal, and minerals.

 

Cyber Threats at Major South African Ports

South African freight-rail company Transnet SOC was forced to temporarily discontinue operations at container ports due to a cyber-attack causing computer network malfunctioning. The company was forced to carry out operations manually, including at auto and container terminals at Gqeberha and East London. The export of citrus fruits temporarily stopped and caused shortages as South Africa is the world’s second exporter of citrus fruits after Spain. Organizations in South Africa have urged the authorities to protect ports from vandalism and sabotage.