The GDP of some countries recorded steady double-digit increases, starting with China which penalized exports to support domestic demand. Let’s not forget that China is a very strong exporter of raw and semi-finished raw materials. Furthermore, production has never returned to full capacity, especially for some raw materials. The coup de grace was given by the sea transport crisis. In order to react to the emergency, the shipping companies have formed mega-alliances (The Alliance, Ocean Alliance and 2M) that control the vast majority of transport, aiming at the optimization of loads and overlaps on the routes. Fewer ships, fewer routes result in cargo always fully loaded. Unfortunately, in the ports of destination Covid-19 decimates the manpower that deals with unloading and therefore hundreds of ships remain in the harbor for days waiting to unload their cargo. The lockdown in China penalizes imports into that country, creating further discomfort by decreasing the return flows of containers. In this context of higher demand than supply for transport, the oligopoly of maritime alliances responded in the most logical way, dramatically increasing the cost of freight rates and favoring the richest routes. If this were not enough, in March 2021 one of the largest container ships in the world ran aground in the Suez Canal, blocking a route through which almost 13% of world freight traffic passes for a week. New outbreaks in China repeatedly block the ports of Yantian and Ningbo, the third busiest in the world. Moreover in the present emergency, due to the anti-pollution regulations of some European and North American ports, further limiting the alternatives. In short, in 2019 the transport of a container from the port of Shanghai to a primary European port cost between 1800 and 2000 dollars, today it ranges from 14 to 16000. About 30% more if directed to the USA. The punctuality of the ships went from 80% to 35%. The companies cancel calls at the congested ports at the last moment, leaving the containers ashore in the ports of origin. All this without touching on the theme of energy which deserves a discussion in itself. Will we ever go back to previous levels? And if so, when? The economy is made up of cycles and, although we are describing a series of absolutely exceptional events, supply and demand over time tend to balance out. It will take time and it will not be a sudden transition. Already today the price trend of some products is in a slow, timid decline. Others are subject to speculation, especially commodities listed on regulated markets, in contexts of high volatility. Considering the production cycles, inventory management and the complexity of finished products, we will hardly see any tangible effects on the products that affect us before the end of the year. The situation of maritime transport is more serious, and the solution is further away. The construction of new, larger, more modern and environmentally friendly ships has been launched, reinvesting a portion of the profits of the shipping companies which are estimated to have gone from 27 billion dollars in 2020 to over 36 billion in 2021. Unfortunately, a 400-meter container ship it takes several months to build and there are relatively few shipyards able to work on projects of this type in the world. If price increases can be managed, with all the complications, it is much more complex to struggle with the unavailability of products and supply times that can be doubled or tripled. In the case of our sector we must also deal with a generalized increase in demand which is obstructing the production chain. Distributors who have always acted as a buffer but cannot work with infinite resources, exaggerating stocks, without being able to count on adequate upstream production capacity. Unfortunately, for a few months, it will be essential to work on projects with adequate planning, considering the possible and foreseeable delays and price increases already in the estimation phase without panicking by ordering material in oversized quantities to take cover. Only by a correct and timely communication with one’s counterparties, providing the customers with the right information and intensifying the dialogue with suppliers, will this sector take full advantage of the opportunities that the market is offering. The conflict in Ukraine has further exacerbated that situation. A curiosity: Decision (PESC) 2022/356 of the European Union prohibits the sale, supply, transfer or export, directly or indirectly, of machinery listed in Annex XIV of Regulation (EU) 2022/355 (including lifts) even if not originating in the Union, to any person, entity or body in Belarus or for use in Belarus. It is also forbidden to provide, directly or indirectly, technical assistance. At the moment, it is certainly difficult to make predictions. One thing is certain. As Giovanni Pascoli wrote, “It rains on the wet: tears on blood, blood on tears.” 59
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