The Growing Shortage Of Shipping Containers And Its Impact On Polymers
There is no denying that COVID 19 has altered the lives of people globally. So much so that its impact on business and trade continues to date.
Ever since the pandemic, the shipping industry has been facing massive disorder and mayhem – the kind that has never been seen or heard before. And this disruption has spiraled into the polymer market as well. Let’s look at it in some more detail.
Demand And Supply – The Changing Game
During the formative days of COVID 19, life nearly came to a standstill including, global trade. With nothing moving as expected and restrictions imposed throughout the world, shipping companies were forced to cancel trips and halt all activities. Many containers got stuck at ports.
But slowly, as the economy started showing signs of revival, especially in the US, there was again a surge in demand, a rise in imports from Asia, and a growing trade deficit. To meet this heightened demand, companies needed more containers and vessels to ship the cargo – creating a severe shortage of both.
The sudden revival of activity meant more ships were waiting to dock and unload the cargo – sometimes waiting for weeks to unload. And the resultant delay in getting back to reload, forcing excessive congestion, delays and stressing the global supply chain even further. With so much tug of war happening between imports and exports, the shipping costs have fluctuated too.
How Its Affected Polymers
The low availability of shipping vessels and high shipping costs created an unprecedented imbalance in the polymer market. And since polymers have a direct relationship with the packaging industry, as food packaging materials, their prices were also impacted.
So even though polymer prices may be low in one country, the overall absence of shipping options has led to lopsidedness and lack of movement of materials to stabilize the cost. Additionally, the shortage of imports is fueling a rise in domestic prices due to reviving and increased demand – creating a spiraling effect felt even today.
Also worth noting is the fact that at the time when the pandemic was at its peak, numerous people lost their jobs. As a result, household income was severely affected. With fluctuations in spending power, the demand for plastic products got impacted too.
Who would have thought two years ago that the world would undergo such mammoth changes which would alter the course of how we live, trade, and function? Only time will tell whether the aftermath of the COVID pandemic will ease completely, and things will go back to normal – not just in peoples’ lives but the world of shipping, trade, and polymers as well. Until then, it will be interesting to watch whether the polymer prices stabilize and the changing trends, not just in India but on the global scene.
Would you like an expert opinion on how to tweak your packaging strategies and account for the price fluctuations currently seen in the packaging industry? Then feel free to book a discovery call with me at www.chetan-jain.com.