Effects of COVID -19 in the Global Maritime Industry

UNCTAD Review of Maritime Transport 2020 that was released ON 12^th November 2020 estimates that the Global maritime trade will plunge by 4.1% in 2020 due to the unprecedented disruption caused by COVID-19. The report warns that new waves of the pandemic that further disrupt supply chains and economies might cause a steeper decline. The pandemic has sent shockwaves through supply chains, shipping networks, and ports, leading to plummeting cargo volumes and foiling growth prospects.

The UNCTAD Secretary-General Dr.  Mukhisa Kituyi stated that the global shipping industry will be at the forefront of efforts towards a sustainable recovery, as a vital enabler of the smooth functioning of international supply chains. UNCTAD expects maritime trade growth to return to positive territory and expand by 4.8% in 2021, assuming world economic output recovers. But it highlights the need for the maritime transport industry to brace for change and be well prepared for a transformed post-COVID-19 world.

To cope with pandemic-related disruptions, players in the maritime sector were forced to adjust their operations, finances, sanitary, and safety protocols as well as working practices and procedures. Besides, several governments, through their border agencies, port authorities, and customs administrations, made reforms to keep trade flowing while keeping people safe.

The pandemic may have a long time effect on globalization, it has brought a sharp focus on the topic of supply chain shortening including nearshoring and reshoring with less dependence on just-in-time and lean inventory models. It thus brings back the concept of building strong regional economic blocks.

The COVID-19 has also exposed how unprepared the world seemed to be in the face of such a crisis, the report observes, underscoring the urgent need to invest in risk management and emergency response preparedness in transport and logistics.

UNCTAD’s director of technology and logistics, Shamika N. Sirimanne, said the pandemic should not push to the back burner action to combat climate change in shipping. Therefore, post-COVID-19 recovery policies should support further progress towards green solutions and sustainability.

She further stated that the momentum of current efforts to address carbon emissions from shipping and the ongoing energy transition away from fossil fuels should be maintained.

The pandemic has harnessed the digital transformation and elimination of paperwork in the shipping industry, including in ports, the report observes, reinforcing the need for standards and interoperability in electronic documentation.

Many trade facilitation measures taken during the pandemic require further investments in digitalization and automation. Accepting digital copies instead of paper originals, pre-arrival processing, electronic payments, and customs automation all help speed up international trade. In line with this Intergovernmental Standing Committee on Shipping-ISCOS introduced a mobile-based trade facilitation platform dubbed ISCOS Shipplinc for reporting and monitoring NTBs and other incidences that are likely to be encountered by shippers while moving their cargoes.

The platform came at a time when social distance was becoming a norm, physical offices were turning virtual but cargo movement red tapes were on the rise. It has enabled several shippers to report various agencies causing them delays at the comfort of their locations.