“The demand from the Western Economies (which has been on the decline), rising interest rates, the Ukraine-Russia conflict & the Covid situation globally in general & in China in particular, will all set the trend for the future,” shares Sunil Vaswani, Executive Director, CSLA.
How has been the business for shipping lines, last year and through this year?
Container export volumes out of India grew by about 19% in 2021 over 2020 which was driven by the rise in demand in the U.S. & Europe. The export volumes during the second half of 2022 dipped though, as compared to the second half of 2021, although they remained significantly higher than the 2020 levels.
Trends that will drive the shipping and logistics sector in the months to come?
The demand from the Western Economies (which has been on the decline), rising interest rates, the Ukraine-Russia conflict & the Covid situation globally in general & in China in particular, will all set the trend for the future. Due to the lifting of the Covid restrictions in China, the number of Covid cases have been on the rise nationwide. Port personnel are no exception although no large scale disruption in port operations have been reported so far. Also, the heavy congestion at USWC ports is now thankfully a thing of the past. It’s to be seen though how the next couple of weeks shape up. If the current situation continues without further deterioration, the supply chains would function without any major disruptions.
The current geo-political scenario and its impact on the global supply chains?
The current geo political situation is indeed a matter of concern. With no immediate solution to the Ukraine-Russia conflict in sight, the drain on the global economy will only get more severe which obviously will impact the global trade even more adversely.
Challenges facing the shipping lines?
The demand from the Western Economies (which has been on the decline), rising interest rates, the Ukraine-Russia conflict & the Covid situation globally in general & in China in particular, all impact cargo flows & eventually the bottom lines of the shipping lines.
Further, the IMO emission reduction norms that come into effect from the 1st of Jan 2023 have made the shipping lines rework their strategies in terms of new builds, chartering / off-hiring, scrapping & redeployment of their vessels to meet these norms.
On the home front, high port charges at Indian ports, as compared to those at some of the major foreign ports, prove to be a challenge for the shipping lines, who have been increasing capacities and introducing new services out of India.
