WALVIS BAY - The American government’s attractive Covid-19 stimulus packages have increased demand for imported goods in North America mainly from the Far East, and cargo carriers have thus opted to service these routes, making billions in revenue.
This, however, is at the expense of smaller African ports such as Namport, which has seen a disturbing increase in blank sailings and very low turn times as well as a shortage of containers.
This observation was made by Namport CEO Andreas Kanime on Friday at Walvis Bay.
Both former American president Donald Trump and current leader Joe Biden had between 2020 and 2021 signed off stimulus and relief packages worth trillions of dollars to help cushion the impacts of the pandemic on ordinary consumers and businesses.
However, industry experts are saying Americans are, with this assistance, buying a lot of goods online, especially from the Far East.
As a result, the demand to ship cargo on these routes also increased, making less containers available for shipping to and from smaller ports.
According to Kanime, the demand, driven by the stimulus package and improved disposable incomes, has created immense capacity for shipping and the diversion of vessels to service the North American market.
“Suffice to say this has been at the expense of less lucrative and relatively smaller markets such as ourselves here in Africa.
Therefore, we have since the first quarter of this year seen a serious increase in blank sailings, very low turn times and a shortage of containers,” he explained.
Kanime added that the shortage is being experienced in the 20-foot containers that are mostly used for the export of mineral ores, and as dictated by the laws of supply and demand, a steep increase in freight rates.
The shipping industry and global shipping lines are expected to declare combined profits in excess of approximately a massive N$200 billion in this abnormal phenomenon, amidst the turmoil in the shipping industry.
“The implication of that is that importers and exporters and ultimately the consumers are paying more, and this speaks to sustainability,” Kanime added.
“Indications are that the current equipment shortages will subsist well into the year 2023, and possibly into 2024. While previously the main challenge for us all was cargo, we have done fairly well as an industry to grow the cargo volumes from our trade corridors, and we have seen very positive movements over the past few years.”