UNCTAD tells Reuters that rising shipping rate threatens global economic recovery

By Jonathan Saul

LONDON (Reuters) – Rising shipping rates pose a threat to global economic recovery, and small countries dependent on shipping by sea believe it will be hardest hit by rising import prices, the UN agency UNCTAD said on Thursday.

The rising demand for consumer goods during the pandemic has created large supply necks around the world, which has had an impact on the supply of container vessels and containers to transport cargo.

Shipping and port officials expect supply chain disruptions to be extended until 2022.

“The current rise in freight rates will have a major impact on trade and will weaken the socio-economic recovery, especially in developing countries, until maritime transport operations return to normal,” said UNCTAD Secretary General Rebeca Grynspan.

In its 2021 Maritime Transport Review, UNCTAD said that the current rise in container freight rates could continue to increase the overall level of import prices by 11% and the level of consumer prices by 1.5% between now and 2023.

“The impact is expected to be more significant for small economies that are highly dependent on imported goods for their consumption needs,” he said.

UNCTAD said maritime supply chain participants, including container lines, ports, inland transport providers, customs and shippers, “should work together to share information and make maritime transport more efficient.”

“In the face of cost pressures and the disruption of the sustainable market, it is increasingly important to monitor market behavior and ensure transparency when it comes to setting rates, fees and surcharges,” he said.