Consumers are staring at a higher cost of goods next year on the back of the soaring freight rates unless the bottle-necks surrounding the marine industry are resolved quickly, the United Nations has warned.
The UN’s trade and development agency- United Nations Conference on Trade and Development (Unctad), says global import price levels could increase by 11 percent and consumer price levels by 1.5 percent between now and 2023.
The least developed countries will be hit hard by the crisis with the hike in consumer prices expected to top 2.2 percent in these nations.
The New York-based agency says a surge in container freight rates could impact negatively on consumer prices if the current chain disruption is not contained.“Global consumer prices will rise significantly in the year ahead until shipping supply chain disruptions are unblocked and port constraints and terminal inefficiencies are tackled,” said Unctad.
In its report on Review of Maritime Transport 2021, Rebeca Grynspan, Unctad secretary-general, said the current surge in freight rates will have a profound impact on trade and undermine socio-economic recovery, especially in developing countries, until maritime shipping operations return to normal.“Returning to normal would entail investing in new solutions, including infrastructure, freight technology, and digitalisation and trade facilitation measures,” she said.
The agency said the medium-term outlook remained positive but it predicts the annual growth will slow to 2.4 percent between 2022 and 2026, compared with 2.9 percent over the past two decades.
Global supply chains faced unprecedented demand from June last year as consumers spent more on goods than on services at the height of Covid-19 containment measures that was imposed by different countries.
But the increase in demand hit several constraints, including container ship-carrying capacity, container shortages, labour shortages, congestion at ports, and Covid-19 restrictions.The mismatch led to record container freight rates “on practically all container trade routes”, according to the report.
According to Unctad, the Covid-19 impact on maritime trade volumes last year was less severe than initially projected.
Maritime trade contracted by 3.8 percent to 10 billion tonnes in 2020 and is projected to increase by 4.3 percent next year.
The Democratic Republic of Congo is set to join the East African Single Customs Union in a move that will ease the movement of goods and services to the mineral-rich nation. This follows the endorsement by the Council of Ministers to have DRC join the East African Community (EAC) as the seventh member state under the single customs union, goods moving from the member states will not be subjected to tariffs as is the case at the moment.
Throughput cargo at the port of Mombasa increased by 4.4 percent in nine months to September when compared with the same period last year, highlighting a slow recovery as the maritime trade grapples with the effects of Covi-19.
Consumers are staring at a higher cost of goods next year on the back of the soaring freight rates unless the bottle-necks surrounding the marine industry are resolved quickly, the United Nations has warned.
