Freight rates spike to triple due to container shortage

DSC_3749-0-1024x678 A cargo vessel is seen in the Yangon River. Photo : Phoe Khwar

07 Dec 2020 - Source: Global New Light of Myanmar - Pandemic-induced container shortage pushed up the freight rates to almost triple in Myanmar, businesspersons in the logistic industry shared their opinions.The container shortage has become the biggest disrupter in shipping amid the coronavirus impacts, on the back of robust demand on the Asia-Europe and transpacific trade. Container shipping costs are drastically surging.

The shipping cost in Asia has increased from three-fold to five-fold from last year's rates. Container shortage is forcing up the shipping rates and also exacerbating other additional costs. The empty containers are desperately needed in Asia, but they are scattered at the ports across Europe, the experts pointed out.

The logistic sector is hugely affected by the pandemic, and some importers are holding back the containers and not return to carriers yet. Myanmar has faced container shortage problem since October, and it is expected to extend to another two months, traders said. The value of Myanmar's maritime trade for the period between 1 October and 27 November in the 2020-2021 budget year totalled US$3.18 billion, a sharp drop of over $963 million compared to the year-ago period, according to the Ministry of Commerce.

While maritime exports have valued at $1.248 billion, imports have registered at $1.934 billion. Compared to the corresponding period in the 2019-2020 financial year, both exports and imports were lower by $470-490 million. Meanwhile, the value of trade through the border was estimated at $1.14 billion, a decrease of $565 million from last FY. The country's total external trade reached $4.3 billion, which plunged from $5.85 billion recorded in the year-ago period.

Myanmar exports agricultural products, fishery products, minerals, livestock, forest products, finished industrial goods, and other products, while it imports capital goods, consumer goods, and raw industrial materials. The country currently has nine ports involved in sea trade. Yangon Port is the main gateway for Myanmar's maritime trade and includes the Yangon inner terminals and the outer Thilawa Port.—Htet Myat (Translated by Ei Myat Mon)

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