lesson 4 - Global shipping Flashcards
what’s happening to the maritime shipping demand after covid
global maritime shipping demand continues to see significant growth amid china’s export boom and port congestion. Asia-pacific demands dominates the maritime shipping market.
what’s happening to maritime shipping capacity after covid
shipping routes from asia = experiencing severe capacity shortage, east MED - eurp shipping routes faces capacity shortage 6 months in a row, capacity & demand are balanced in the shipping route Euro-N.America
what’s with air shipping demand and capacity after covid
global air traffic sees significant growth amid e-commerce boom + ocean shipping constraints , low value cross border e-commerce demand continue to surge, reaching levels 10x larger than pre-covid.
high-value goods (tech, pharma, perishables) = leading sectors of air trade growth
global international air cargo capacity increased +8 YoY out especially from China + hongkong. Airlines increased capacity on NE Asia - EU corridor, shifting freighters from AMLA + driving up EU-AMLA. Low-value air exports from china & hong kong disrupt regular trade, causing air cargo capacity shortages
what happened to air shipping during covid
reduced air freight capacity - reduced passenger flight schedules, passenger aircrafts turned into cargo carriers, cargo tonne-KM decreased 10.6%. increase demand for goods - PP&E products, medical supplies. Rising air freight rates - limited capacity + high demand led to increase in rates.
shipping price increase: in june 2020, there was a significant increase in shipping costs, global shortages of shipping containers casued the price increase. The cost increased by 178% from china to north america (increased by $2676 per container)
what happened to maritime shipping during covid
7% decline in maritime container imports. due to factory shutdowns, reduced workforce availability + lockdowns. shipping alliances (THE Alliance, 2M Alliance, Ocean Alliance) cancelled 126 sailings. caused container shortages due to empty containers not being returned to suppliers quickly enough.
what are straits and the importance of straits in shipping
transport goods easily + quickly throughout the world, a significant volume of maritime trade takes place. locations’ history, strategic position
what are the red sea attacks + effects
iranian-backed Houthi rebels in Yemen - swept down from Yemen + seized the capital (Sanaa 2014). attacks have increased since the start of war between Israel + hamas.
40% of asia-europe trade normally transits the red sea. $1 milllion more round tips in additional fuel costs. more than 150 commercial ships have chosen the longer route since November - insurance premiums have shot up nearly 10x. have caused massive chain disruption - these higher costs (of a average weekly shipping cost of 40 ft freight container from 1500 to 5500) would lead to goods inflation of 1-2%
what’s the future response to risk in the shipping industry
increasing resilience; diversify production + shipping routes to mitigate risks, robust operating models to account for risks, trying to nearshoring or reshoring.
tracking: anticipate arrivals + departures, vessel location + crew status, enabling them to prepare for potential rescues/reroute ships
digital transformation: from the cyber attacks that have increased 400% due covid-19, looking to make improvements in security assurance for operational + regulatory data. Looking optimize operations with robotic process automation, digital ship services, greater emphasis on data + predictive analytics to optimize shipping routes
what’s the prediction for the future of shipping industry
trade volumes will increase by 2% in 2028, dry bulk rates are looking to continue being volatile in 2022. Global landscape with geopolitical events.
how would onshoring movement impact the shipping industry
potentially lower shipping costs and faster shipping with shorter supply chains and fast reaction times to industry shocks.
what are some other countries that would act as china in terms of providing cheap labour
india, vietnam, indonesia (new capital being built so good opportunity for companies to build factories there)
how can the shipping industry diversify production + shipping routes + improve cyber security
addressing a system-level wide cybersecurity response where all the stakeholders are involved and create a policy that is effective. diversify production + shipping routes through different transportation routes.
