Freight rates will normalise higher than pre-pandemic

Significance

Ripple effects from the pandemic initially caused the problems. The week-long blockage of the Suez Canal and the closure of some of China’s largest container ports due to COVID-19 outbreaks amplified the disruptions. A sharp rise in consumer demand, especially in the United States, increased demand for containers and further strained supply chains.

Impacts

• Digitalisation of the industry is accelerating, and online competition between carriers and logistics providers will increase in 2022.
• The bottlenecks will continue to drive inflation, as well as the competitive forces between different types of firms importing goods.
• Container shipping lines will see record profits in 2021, leading to significant acquisitions; shipping lines will acquire logistics firms.