ONU: Increased cost of maritime transport can cause price increases in imports and consumers

If the upward trend in world shipping rates continues, import costs and consumer prices will increase "significantly", with the greatest impact for sm

If the upward trend in world shipping rates continues, the costs of imports and consumer prices will increase "considerably", says a report by the United Nations Conference on Trade and Development (Unctad). According to the UN General Assembly body, if container freight rates continue at their current high levels, global consumer prices are forecast to be 1.5% higher than expected in 2023. The increase would reach 7.5% in small island nations and 2.2% in least developed countries. UNCTAD's Shipping Report 2021 forecasts that import prices will increase by 11% on average due to higher freight rates, but island nations, which rely primarily on shipping, could see increases of up to 24%. %. Unctad states that the pandemic exposed and amplified problems that already existed in the shipping sector, especially labor shortages and infrastructure needs. However, the impact of the COVID-19 pandemic on seaborne trade volumes in 2020 was less severe than initially expected. Seaborne trade initially contracted by 3.8% in 2020, reflecting an initial shock, but has since recovered and is forecast to increase by 4.3% in 2021. On this subject, Unctad points out that, even with these results, the "secondary effects will be far-reaching and could transform maritime transport." Although medium-term prospects remain positive, he warns that they are subject to "increasing risks and uncertainties." Despite a "nascent" recovery, the UNCTAD analysis paints a picture of "unprecedented pressures" on global supply chains, coupled with "impressive spikes in freight rates," and with major price hikes coming soon. for consumers and importers. The agency's secretary general, Rebeca Grynspan, stressed that the long-term recovery of the sector "will depend on the trajectory of the pandemic and, to a large extent, on whether we are able to mitigate the adverse factors and on whether the vaccines are deployed by everyone". The report also indicates that "bottlenecks" in the supply chain hampered economic recovery, as the rebound in trade was met by logistical problems stemming from the pandemic, such as "shortages of equipment and containers, fewer services insurance, congested ports and increased delays and waiting times”. At the same time, the sector is bracing for climate resilience and adaptation, as well as the urgent need to decarbonize and find alternative fuels that reduce carbon emissions, which will inevitably come at a cost to industry. “Looking ahead, UNCTAD affirms that global socio-economic recovery will depend on smart, resilient and sustainable shipping and a comprehensive global vaccination effort, in which developing countries have fairer access to vaccines,” the report points out.

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