Speaking at the Mediterranean Ports and Shipping 2021 conference, the president of the Port Authority of Valencia (PAV), Aurelio Martínez said that freight prices will normalise in the second half of 2022 when international demand for containers slow down.
“Higher freight rates mean higher costs and therefore fewer exports for regions like ours, which will mean that the growth rate will be lower than what we could have obtained in a normalised context,” claimed PAV president.
Martínez inaugurated the Mediterranean Ports and Shipping 2021 conference. During his speech, he explained the pattern of transport tariffs in the current context, which is characterised by record highs, sustained increases over a long period of time and increases in all routes and types of traffic.
This freight rate rise is due to various causes according to the president of the PAV, such as “the increase in internal demand, especially in the United States, the congestion generated in the North American logistics chain where there are ships stopped for 15 days in ports such as Los Angeles to unload, the deficit of containers in the face of the increase in international demand, or the prices of bunkering and fuels”.
This situation has therefore caused an increase in the time that ships spend in ports as well as in import and export costs, an impact on inflation, even shortcomings in the entire logistics chain in some countries, and consequently, a slowdown in world growth.
The president of PAV believes that we can learn a lesson for the future from this situation which is affecting maritime logistics. “When you launch a measure to increase internal demand with the same infrastructures and suddenly many ships come in, you cannot provide services to everyone,” he explained, and he went on to point out that “this is the problem, as the infrastructures of the United States were not prepared to withstand this avalanche of imports, which has been one of the fundamental reasons that are affecting freight rates”.
In this line, he assured that in the US, inventories are still very low and they are selling a lot so they need to replenish them. “The boom in demand will continue for a few more months, but it won’t last forever. We believe that by the middle of 2022 this situation will normalise,” said Martínez.
The Regional Minister for Territorial Policy, Arcadi España, who also took part in the same event, warned of the fragility of globalisation in the face of the rupture of its value chain, and the need for a more regionalised globalisation.
In view of the environmental challenges, Arcadi España noted that “we have been obliged to accelerate the changes in digitalisation, reduction of carbon emissions and innovation.”
The Mediterranean Ports and Shipping Conference is an international logistics event with two days of lectures by 30 speakers who focus on the needs and challenges for the transport and logistics sector in the Mediterranean area.
The conference is attended by more than 100 participants, including representatives of administrations, company managers, port authorities, shipping companies, terminal operators, importers and exporters, among others.
