The report warned that the high freight prices if sustained, will have a knock-on effect on import and consumer price levels.
The report titled the Review of Maritime Transport, says freight rates are expected to remain high, fuelled by continued strong demand against a backdrop of growing supply uncertainty and concerns about the efficiency of transport systems and port operations.
The average price for a 40-foot container stands at US$9,146.41, according to shipping consultancy Drewry’s World Container Index. The benchmark decreased 0.5% last week but remains 238% higher than a year ago. Drewry expects rates to remain steady this week.
The report comes as container lines are booking hefty profits. Last week, French shipping line CMA CGM reported an eye-watering profit of US$5.6bn for the third quarter, up from US$567mn for the same period last year.
It is a similar story at other major carriers; Maersk, for example, notched up a profit of US$5.5bn for Q3 – a five-fold increase on the same period last year.
In what they said was an attempt at calming the market and inflation fears, shipping companies moved to freeze spot rate increases earlier this year and shift to longer-term contracts.
However, experts were skeptical of the impact of such measures. “In other words, setting a cap on spot rates is a different way of saying that a higher willingness to pay on spot is not necessarily what gets you space on the ship. And, of course, if the market is at peak anyway there is nothing lost in implementing such a cap,” Lars Jensen, a shipping container specialist, wrote on LinkedIn at the time.
Steve Saxon, a partner at McKinsey, said in a briefing last week that longer-term contracts are likely to become more common and this will help stabilise the market. He added that shipping rates may “normalise” in the first half of 2022: “When we say normalise, we don’t see rates likely to fall back down to the levels seen in 2019.” In a less optimistic scenario in which there is prolonged congestion at ports or further Covid outbreaks, rates will remain elevated next year, he said.
The potential effect of high freight rates on consumer and import prices varies by country groupings. UNCTAD suggests small island developing states or SIDS, and least developed countries (LDCs) are most at risk of higher prices because they depend more on the international trade system for goods.
The research shows SIDS are facing a 24.2% hike in import price levels, while LDCs could be lumped with an 8.7% rise.
“The impact is generally greater in smaller economies. Thus, in Estonia consumer prices would rise by 3.7% and in Lithuania by 3.9% compared with only 1.2% in the United States and 1.4 per cent in China,” states the report.
“This partly reflects their greater ‘import openness’ – the ratio of imports to GDP – which is typically higher in smaller economies – 55% in Lithuania and 60% in Estonia, compared with 11% in the United States and 15% in China.”
The findings also indicate that sustained high shipping rates would not only impact exports and imports, as well as production and consumer prices, but also the prospects for short and medium-term economic recovery from the pandemic. Governments including those of China, the US and Vietnam are “worried” about this and have raised concerns about shipping companies, UNCTAD says. An investigation into carriers has also been launched by competition authorities in Australia.
Elsewhere, UNCTAD’s report predicts that annual growth in maritime trade between 2022 and 2026 will slow to 2.4%, compared with 2.9% over the past two decades. It also states the pandemic has accelerated maritime “megatrends” such as digitalisation and sustainability that are set to transform the industry over the longer term.
I was never in charge of maritime industry —Saraki
It could also be recalled that Amaechi had made a couple of visits to the Lekki deep seaport, even on a Sunday, before the presidential visit, none of which Saraki attended.
” Gbemi is also made of sterner stuff given her role in the “Otoge” political tsunami in Kwara which eventually swept off Bukola Saraki, her blood brother, from the political dominance in Kwara politics, a role which earned her the present position in the present dispensation.
“Today is my fifth week of assuming the leadership of the Ministry of Transportation”, she declared last week Friday in Lagos.
“We came to take stock of the sector. We had taken the stock of the Road sector,” she said.
Giving her summation of her findings at the end of the tour, she declared” Apapa and Tin Can ports are in terrible need of repairs.
“We will go and come back for repairs.
“We have the short, medium, and long-term plans for this. We need to start with rehabilitation here. Another problem here is power”
The Minister met various groups who are stakeholders in the industry.
Among them are women groups in maritime, terminal operators, stevedores, maritime workers union groups, haulage, and transport operators, maritime lawyers, freight forwarders, and maritime press.
We have political will to ensure CVFF is disbursed—-Saraki
The Minister of State for Transportation, Senator Rukayyat Gbemisola Saraki has expressed willingness to muster the necessary political will to ensure the controversial Cabotage Vessels Financing Funds (CVFF) are disbursed before she leaves office.
“In the course of this visit, I have also interacted with so many stakeholders, including the indigenous ship owners.
“It is really a shame that this fund has not been disbursed, I learnt the value is $350 million now and I am not sure any part of it is missing.
She added that the disbursement would follow the approval by the National Assembly after beneficiaries must have been shortlisted.
P&ID fraud : Court convicts, winds up Marqott Nigeria Limited.
Justice D.U Okorowo of the Federal High Court sitting in Abuja has convicted and wound up Marqott Nigeria Limited, one of the 30 companies associated with the Process and Industrial Development Limited, P & ID, for money laundering.
The company was convicted on Thursday, June 16, 2022, after being found guilty of four-count charges bordering on money laundering preferred against it by the Economic and Financial Crimes Commission, EFCC.
Count one of the charges read: “That you, Marqott Nigeria Limited, being a designated Non-financial Institution; and Giovanni Beccarelli, Valentina Fantoli, and Dimitri Duca, being directors of and signatories to the bank account of Marqott Nigeria Limited, sometime in September 2014, in Abuja, within the Abuja Judicial Division of the Federal High Court, failed to comply with the requirements of submitting to the Federal Ministry of Industry, Trade and Investment, a declaration of activities of Marqott Nigeria Limited contrary to Section 16(1) (f) read together with Section 5(1)(a)(ii) of the Money Laundering (Prohibition) Act, 2011(as amended and you thereby committed an offence punishable under section 16(2)(b) of the same Act.”
Count two read: “That you, Marqott Nigeria Limited, being a designated Non-financial Institution; and Giovanni Beccarelli, Valentina Fantoli, and Dimitri Duca, being directors of and signatories to the bank account of Marqott Nigeria Limited, sometime in September 2014, in Abuja, within the Abuja Judicial Division of the Federal High Court, failed to develop programs to combat money laundering and other illegal acts, to wit: failure to designate at management level a compliance officer within any strata of Marqott Nigeria Limited, contrary to Section 16(1)(f) read together with Section 9(1)(a) of the Money Laundering (Prohibition) Act, 2011 (as amended) and you thereby committed an offence punishable under Section 16 (2)(b) of the same Act”.
At the point of the first arraignment on February 7, 2022, the defendant pleaded “not guilty” to the charges, setting the stage for a full trial.
In the course of the trial, the EFCC presented many witnesses and tendered many documents as exhibits.
In his judgment, Justice Okorowo found Marqott Nigeria Limited guilty of all the four-count charges and convicted it accordingly. He also ordered that the company be wound up and its entire assets forfeited to the Federal Government of Nigeria.
Marqott was first arraigned on Monday, February 7, 2022, for being an accomplice in the $9.6bn Gas Supply and Processing Agreement between the Ministry of Petroleum Resources and P&ID.
Customs4 weeks ago
Finally, FG concessions operations of Customs to Chinese, Nigerian company for 20 years.
Customs4 weeks ago
Customs loses Compt. Danlami Haruna, Area Controller Bauchi/Gombe Command
Customs2 months ago
Exclusive! Mass retirement hits Customs as 549 officers bow out of service in 2023
Customs2 months ago
Customs High Command interdicts officers over assault on Gov. Okonwa’s aide
Customs4 weeks ago
Terrorists overrun Customs Post in Katsina
Customs1 month ago
Court orders Customs to pay ₦100m compensation over gruesome murder of peasant farmer in Kebbi state