SINGAPORE : Global trade dipped 1 per cent in May from the previous month as container shipping congestion and delays stretched to European ports in the North Sea, according to Kiel Trade Indicator data.
For the first time since the outbreak of the Covid-19 pandemic, container ships are now also jammed in the North Sea off the ports of Germany, the Netherlands, and Belgium, the Kiel Institute for the World Economy said in its monthly report. Currently, just under 2 per cent of global cargo capacity is stuck in the area and can neither be loaded nor unloaded.
“Overall, May trade is rather restrained and continues the sideways movement of recent months. However, international trade is again suffering more from the congestion and delays in container shipping, which have now also reached the North Sea,” Vincent Stamer, head of Kiel Trade Indicator, said.
The pandemic highlighted significant challenges in the logistics sector, with many cargo customers struggling to find shipping containers amid labour disruption in the industry. The acute supply chain bottlenecks have led to congestion and delays at ports, a shortage in containers and a sharp rise in the cost of shipping goods.
The Russia-Ukraine conflict and recent pandemic-related lockdowns in China appear to be further dampening global goods trade in the first half of 2022, according to the World Trade Organisation’s latest Goods Trade Barometer in May.
The current reading of 99 remains slightly below the baseline value of 100 for the index, which is a forward-looking composite of real-time indicators, suggesting continued slow growth in merchandise trade.
The organisation has also revised down its forecast for global trade growth this year to 3 per cent from 4.7 per cent earlier, due to the Russia-Ukraine war. Global trade growth in 2023 is expected at 3.4 per cent.
Shipping congestion near Shanghai and the neighbouring Zheijang province currently ties up more than 3 per cent of global cargo, the Kiel Trade Indicator data showed.
More ships were able to depart from Shanghai after some of the Covid-19 restrictions were lifted, and in the second half of May, departures were at a comparable level to China’s other ports.
At present, however, they are again about 15 per cent lower, the data found. To date, exports worth up to 700 million euros ($746m) from China to Germany have been lost due to the lockdown in Shanghai.
“However, the fact that Shanghai exports have risen again in recent weeks despite lockdown measures also shows that companies there are on the starting blocks and will probably be able to ramp up production again quickly if the lockdown ends,” Mr Stamer said.
Overall, more than 11 per cent of all goods shipped worldwide are currently stuck in traffic jams, the data showed.
In the Red Sea — the most important maritime trade route between Asia and Europe — the gap between expected and actually shipped cargo volumes has grown to around 16 per cent, having almost closed in February, the report said.