The nightmare of global chemical shipping continues

The shipping woes that have plagued the chemical industry for more than a year continue to worsen as delays, shortages and a resurgence of the Covid-19 outbreak add to the chaos in global trade
.

The uneven and erratic pace of recovery around the world has disrupted trade patterns since the first lockdowns were imposed across much of the world in early 2020, causing transport prices to soar sevenfold or more in some cases
.

An early economic recovery in China and the wider Asia-Pacific region has unbalanced global cargo flows, exacerbated by a string of ongoing disruptions, including a blockage of the Suez Canal and winter storms along the U.
S.
Gulf Coast
.

the situation worsens

The situation has somewhat stabilized from the highs brought about by these disruptions, but has started to soar again, with the outbreak in the port of Yantian in China and the emergence of a delta coronavirus variant in India adding new complications
.

"Ships have been volatile this year and have become more even in the past few months, but we are seeing tensions coming," one source said.
"Freight rates are going up
.
"

Another source said: "Freight rates are already the highest in May, and they are also high in June
.
"

“Shipping companies are trying to address the lack of containers in Asia
.
Any shipments from Asia will be delayed, while shipments from the Middle East have a lot less delays,
” a third source added
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The outbreak in Greater China Yantian, an important southern China trade hub, has further exacerbated shipping disruptions, blocking the ports of Shekou and Nansha that have spread to the region
.

The blockage is worse than when a ship blocked the Suez Canal, the world's important trade artery, for days, and queues are understood to continue to stretch
.

According to Maersk's latest news, authorities have successfully reopened Westport's yard for import pickup, and as of June 11, one berth has also reopened, and the port's throughput is about 45%
.

"The total queue time for vessels waiting to berth at Yantian Port has increased due to a steady daily inbound flow," the company said
.
The average additional delay is around 16 days
.

Suez, India, US Gulf

Meanwhile, the fallout from the previous Suez incident continues to reverberate in parts of the global shipping market
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According to the source, logistics are very volatile at the moment, and sometimes prices are pushed up after deals are made
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Other times, prices are increased by thousands of dollars without notice
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The re-emergence of coronavirus cases in India and concerns about the ability of the delta variant to evade vaccine protection have further disrupted trade, with some ship operators avoiding India due to fears of crew infection, according to a shipping source.
Ships docked there are subject to stricter quarantine measures
.

Container shortage, road transport

Road transport is also an issue due to border and quarantine requirements imposed in some regions
.
Further disruptions to shipping, as well as a lack of drivers, have also taken a toll on land transport speeds
.

According to an early survey by the Chemical Business Association, the UK chemicals distribution body, 85% of companies reported a shortage of containers and 90% were dealing with rising transport costs and a shortage of drivers in the UK and EU
.

“Member companies reported significant issues such as undercapacity, severe delays and logistical gridlocks across the international supply chain, along with rapidly increasing costs
.
The combined effects of Brexit and the pandemic have further exacerbated the risk of heavy-duty vehicle drivers.
chronic shortage
.
"

Manufacturing has grown significantly in recent months as lockdown measures have eased in many countries, and the third quarter is expected to be the strongest period in 2021, meaning demand will continue to increase and boost demand for chemicals, making many Price inflation has soared along the value chain
.

Industry response

The shipping industry has moved to deal with the impasse
.
Many companies are starting to expand their fleets and container capacity, with Germany's Hapag Lloyd increasing its container holdings and industry giant AP Moller Maersk stepping up capital spending this year
.

The positive impact of increased container supply is still constrained by the supply of ships, and the underlying logic of keeping supply chains operating quietly for years has also been short-lived by the pandemic, with ships often docking at the wrong places due to limited material to and from
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As seen in the semiconductor chip market this year, building new capacity to deal with shortages is a time-consuming process
.
Norway-based chemical transport and storage specialist Odfjell expects global chemical transport capacity to grow by around 1% per year through 2023
.

This offers profit potential for the struggling shipping industry, but current costs, volatility and inefficiencies in global trade are holding back that potential
.

Chemical shipping and terminal storage experts say a key factor in normalizing the industry is an end to lockdown measures worldwide
.

According to Odfjell, key demand areas have recovered well in the first half of the year, but the economics of round-trip transportation continue to be affected by the pandemic response
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Another factor that is currently exacerbating shipping problems is the prolonged disruption of trade and the cumulative impact of a year and a half of supply chain breakdowns and distortions
.

Disruptions are likely to continue until lockdowns are comprehensive and long enough to allow the long process of supply chains to slowly return to their normal footing
.
This may take some time due to vaccine rollout schedules in many emerging economies
.