Destabilised maritime chain brought spiral of reactions: UNCTAD

The United Nations Conference on Trade and Development (UNCTAD) published the report “COVID-19 and Maritime Transport” to highlight the challenges faced by the transport and logistics sectors due to the pandemic, measures implemented to cope, and lessons to be learned.

The report details the impact of COVID-19 on various shipping markets, from the initial contraction of trade in early 2020 through the upswing later that year and the longer-term demand recovery thereafter.

“In terms of vessel calls and on a yearly basis, container shipping and LNG and LPG carriers seem to have been affected the least. Port calls by dry breakbulk carriers and Ro-Ro vessels were the hardest hit. Vessel call patterns varied by region, reflecting the asynchronous trajectory of the pandemic through time and geography,” said the report, which includes focus segments on Africa, Asia, and Latin America and the Caribbean.

"By the end of 2020, connectivity of the world’s major hubs and most connected nations had improved. On the other hand, there was no sign of improvement in the liner shipping connectivity of the least-connected countries. SIDS were particularly affected by reduced vessel calls. For SIDS, missing one call might be vital for their economies and local communities as they depend heavily on maritime transport for much of their imports, including the provision of essential goods. Therefore, it is crucial that the liner shipping connectivity of SIDS, which is already relatively low, should not be further reduced," said the report.

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The report noted that some deficiencies in maritime supply chains were evident before the pandemic, even if the pandemic exacerbated them, including security and cybersecurity issues, inadequate infrastructure, capacity issues, congestion, and hinterland transportation limitations.

“A spiral of reactions – the absence of demand following the initial shock; lockdowns; standstill of economic transactions and production; revisited working practices; difficulties for consignees to collect cargo; shifts in ship capacity management by carriers; volatile utilization of warehousing and distribution facilities; and lack of containers to be filled in several production areas – all led to significant backlogs in container trade. The implications were present at both the first-mile and last-mile stages of the chain. Thus, local interruptions had a broader impact along the entire maritime supply chain worldwide,” said the report.

Summarising key lessons and takeaways from the pandemic, UNCTAD said that directives from global institutions had proven instrumental in guiding private and public sector responses.

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Technology, telecommuting and digitalisation were noted as critical in the early stages of the pandemic, allowing remote, stable access to systems and documentation. Digital technologies also enabled the co-operation, co-ordination and partnerships between organisations that UNCTAD saw as essential to maintaining transport networks during the pandemic.

“Cooperation between service providers and suppliers for coordinating, adjusting practices, and identifying alternatives was essential, especially when schedules needed to be adjusted and cargoes rerouted to alternate ports. Similarly, helping the consignees and manufacturers mitigate the impact of the pandemic and related restrictions was important; for example, by suspending penalties and ground rent charges on containers caught up in the lockdown,” the report said.

One limitation repeatedly referred to in the report is how organisational and knowledge capacities compromised the ability of entities to address challenges and implement measures to face those challenges.

COVID-19 and maritime transport: Navigating the crisis and lessons learned is available to download for free from the UNCTAD website.