More than 2% of the global freight capacity is at a standstill in Europe’s North Sea

10:04pm 21st July 2022

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According to Germany’s Kiel Institute for the World Economy (IFW) expert, Vincent Stamer, more than 2% of the global freight capacity remains at a standstill in Europe’s North Sea, putting European ports in a “very unusual” situation.

The global supply chain disruptions seem to be dragging far longer than expected, with shipping container shortages and sea ports’ bottlenecks spreading beyond Chinese hubs.

Unusual situation

According to Germany’s Kiel Institute for the World Economy (IFW) expert, Vincent Stamer, more than 2% of the global freight capacity remains at a standstill in Europe’s North Sea, putting European ports in a “very unusual” situation.

“There is currently no end in sight to the congestion in container shipping,” Stamer said, noting that the current circumstances have had a particular impact on crossborder trade movement between Germany and other countries in the European Union on one side and Asia on the other side, the world’s largest source market for consumer electronics, furniture and textiles, among others.

Stamer further highlighted that the world’s most prominent trade route between Europe and Asia, the Red Sea is also experiencing a 20% drop in the number of cargo vessels, marking the largest gap between supply and demand since the outbreak of the global pandemic in late 2019.

Furthered disruptions

The pandemic and later repercussions have largely impacted the global supply chain and associated sectors, with snowballing logjams at major seaports and corresponding workforce and shipping container shortages driving record hikes in ocean freight rates and lengthy shipping delays across the world.

Over recent months, the global supply chain was subject to yet another crippling wave of disruptions, fuelled by China’s zero-COVID strategy and the lockdown in the country’s largest port, the Port of Shanghai, as well as the ongoing conflict in Ukraine and the subsequent upsurge in fuel prices, which hindered the flow of goods and instigated a series of cost increases and product shortages.

By Karim Tolba

Source: logisticsmiddleeast.com

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