Fred Asiedu Dartey, Head of Freight and Logistics at the Ghana Shippers’ Authority (GSA), has assigned reasons for the recent freight rate hike at the nation’s seaports for which importers and exporters in the country have expressed their displeasure.
Speaking on the Eye on Port programme monitored by norvanreports, Mr Dartey stated that the hike in freight rates at the nation’s seaports is not new as that has been the trend since last year 2020 due to global shortage in containers for goods shipment due to the Covid pandemic.
According to him, global shortage of containers was first triggered at the beginning of the second quarter of 2020 when orders for goods shipment from China exceeded available boxes for shipments.
The shortage of containers was further compounded by the fact that boxes from China was locked up in other countries due to lockdowns implemented by governments across the globe.
“With the onset of Covid a number of vessels were laid off so capacity issues cropped up in the beginning, and while most countries were going on lockdown, and people thought economies were going down some countries recovered quickly than others. An instance is China and that’s when there was a global need for PPEs and others and so demand just shot up for many reasons.”
“With the shooting up of demand, a lot of the demand was focused on China and so China found itself in a position where there were not enough boxes to meet the demand because the boxes that had gone out were locked up in various ports, due to congestion, lockdowns among others.”
“So containers were locked up all over the world and the demand was also towards China. So that imbalance, triggered the process of the shortage and that was the beginning of the challenge of container shortage and it has gotten worse and worse,” stated Mr Dartey.
Touching on how the shortage of containers has affected importers and exporters and the country’s shipping industry at large, Mr Dartey asserted that, the challenge of container shortage has led to astronomical rise in freight rates at the Ports particularly freights from Asia.
“We started feeling the impact of the container shortage since the end of the first quarter of last year because freight rate which was around $3,600 dollars for a 40 footer container has increased astronomically.”
“For instance, container from North China was $3,600 in June 2020, by December 2020 it had increased to $7,950. And in May 2021, it had gone up to $10,200 and now it’s between $12,000 and $13,000 for a 40 footer container, that’s is about 260% increase,” he noted.
Speaking further, Mr Dartey intimated that aside from the hike in freight rate, another impact of the shortage of containers on the nation’s shipping industry is the excessive delay in goods shipment.
“Global shortage of containers is very serious because as we speak now all orders to China are not getting available boxes, and so shipments are delayed in excess of a month and half or even two months.”
“So while previously in two weeks a shipment could be effected, now when an order is made, the next best shipment would be in the next 6 weeks. So it’s that grave,” he posited.
