Group 4: What is the State of the Global Shipping Industry and How May Recent Disruptions Affect the Future of the Industry Flashcards
1
Q
what are the different types of shipping
A
- maritime shipping
- air freight
- rail freight
- road freight
- multimodal shipping
2
Q
what is maritime shipping
A
- shipping by sea using cargo ships
- the most common and cost-effective for international shipping
- good for larger heavier things
- the cost per unit for large shipments is low
- but its slower compared to other ways
- susceptible to weather-related delays
3
Q
what is air freight
A
- air cargo
- shipping through airplane
- faster but more expensive
- good fore time-sensitive goods or lightweight
- there are weight and size limitations
- the scheduling is reliable
4
Q
what is rail freight
A
- shipping through trains
- good for domestic or cross continental shipping if infrastructure supports it
- good for large quantities of goods, heavy and bulk items
- its cost-effective for land based shipping
- can move large volumes efficiently over long distances
- limited to locations with rail infrastructure
- slower than air but faster than maritime
5
Q
what is road freight
A
- trucking
- shipping through truck
- mostly for domestic or regional deliveries
- good for medium distances, and door-to-door delivery
- dependent on road conditions and traffic
- not efficient for very long distances compared to rail
6
Q
what is multimodal shipping
A
- intermodal
- combines different methods of transportation together
- good for international or complex supply chains where flexibility is needed
- can optimize costs and transit times
- more flexible routing options
- can be hard to coordinate with different shipping methods
- higher potential for delays at transfer points
7
Q
what is the current state of maritime shipping like (demand)
A
- its the backbone of international trade
- makes up around 90% of global trade by volume
- lots of demand globally for it especially from china, which is the world’s largest exporter
- they will continue to increase the demand for shipping
8
Q
what are recent disruptions in maritime shipping
A
- port congestion
- suez canal blockage
- red sea attacks
- covid
9
Q
what happened with port congestion
A
- major chinese ports have faced substantial congestion, leading to increased lead times and shipping delays
- this then affects global supply chains, affecting trade routes in other regions
10
Q
what happened with the red sea attacks
A
- there have been attacks on commercial ships in the red sea by yemen-based houthi rebels
- since late 2023, they have been targeting vessels linked to isralei interests
- it affects a crucial shipping route, so shipping companies need to move away from the red sea and suez canal and use more costly routes
- this increases the shipping times and costs, and increases the amount of fuel usage and emissions
- they delay supply chains, increasing shipping costs
11
Q
what are important facts about the suez canal
A
- located in egypt
- connects the Mediterranean and red seas
- shortest maritime route from europe to asia -> most used shipping paths
- crucial for global trade, allowing ships to go through it instead of needing to go around the entire continent of africa
- owned by egypt
- they collected revenue from it through tolls they charge on vessels passing through it
- the toll is based on the type of vessel, its size, and cargo capacity
- its a vital source of revenue for egypt, making a significant portion of its foreign earnings
12
Q
what was the 2021 suez canal incident
A
- a massive container ship blocked the suez canal for 6 days
- it contained about $1B worth of cargo
- there was bad weather, but because there was so much stuff on the ship, they decided to go through the canal anyway because it would cost like tens of thousands of dollars every day it was delayed for
- blocked
13
Q
what was the impact of the 2021 suez canal incident
A
- every day it stayed blocking the canal it held up $9-$10B worth of goods
- caused significant delays in global supply chains
- over 400 ships were affected, causing backlog that took weeks to clear
- it caused price increases for shipping rates and various goods, contributing to inflationary pressures globally
14
Q
what would happen to students in terms of cost when the suez canal is down
A
- many products consumed rely on global supply chains
- when its down, then there are delays in the supply chains
- when there’s delays, it leads to shortages of goods = increased prices = more expensive for students
15
Q
what would happen in the future due to the suez canal incident
A
there may be increased investments in other shipping routes and port infrastructures to reduce similar risks in the future
