The shipping industry saw several disruptions in 2021, but the recent floods in Asia and Europe have added to its woes. The post-pandemic phase saw delays and rate hikes in the shipping business due to slower deliveries, lesser containers and port congestion caused by a series of disruptions. And then the floods came.

Share Market Live

NSE

Western Europe witnessed heavy rain and flood in Germany and Belgium. Some regions in the Netherlands, Switzerland and Luxembourg have also been impacted. This has affected the shipping and railway line as well as the entire supply chain.

The rain has adversely affected the railway line coming to German ports (Rotterdam and Hamburg) from the Czech Republic and Slovakia.

Also read:

Explained: What exactly is 1 mm of rainfall?

Experts such as Mandarin Shipping chief executive officer Tim Huxley told CNBC that they faced new headwinds almost every week.

As per the S&P Global Platts report, German steelmaker Thyssenkrupp is not getting raw materials due to intense flooding in Germany's Rhine-Ruhr region.

Coming to China, the Henan province witnessed the heaviest rain in a thousand years as per Xinhua. This affected lakhs of people (including many deaths and mass evacuation) while disrupting life and businesses in the region.

Typhoon In-Fa (the sixth of 2021) hit China's Zhejiang province on July 25 with winds rising up to 38 metres per second at its eye. China produced 3.8 crore tonne of wheat this summer but shipping the same to the rest of the world has now become a problem.

Also read: Apple’s largest iPhone production site unaffected by China floods, claims Foxconn

In June, shipping rates increased due to a rise in COVID-19 cases in southern China port areas. June also saw Ever Given, one of the largest container ships, blocking the Suez canal, which affected shipping traffic and trade.

There has been an increase in demand post the COVID-19 relaxations but it has coincided with the paucity of containers and congestion at ports. The year 2019 was a bad year and 2020 was washed out due to the pandemic. Some discerning customers were willing to pay a premium for timely deliveries and this led to rate hikes and an increase in costs.

Some of the major ports such as the Panama Canal, the New York and New Jersey ports upgraded by investing billions over the last five years, but haven't recovered their investments. Experts expect the global shipping industry to recover only by Q1 CY2022.

Also read: Rising sea levels to put over 400 million people at risk by 2100: Study

First Published:Jul 27, 2021 6:01 PM IST