Quotation: LONDON, Dec 10 (Reuters) - Much like the coronavirus pandemic, and the economic disruption that it has caused, a global shipping crisis looks set to go on delaying goods traffic and fuelling inflation well into 2023.
With the outbreak of the COVID-19 epidemic in 2020, ports of various countries have experienced serious congestion, slow operations, insufficient capacity, lack of containers, etc., and shipping rates have increased rapidly.
With the easing of the COVID-19 epidemic, import and export demand has rebounded rapidly, but ports are congested, freight capacity are insufficient, resulting in increased time and cost of reaching the destination port. Containers are piled up in ports, and empty containers turn around slowly, resulting in a situation where it is difficult to find a container in Chinese ports.
(Containers are piled up in ports)
To alleviate the shortage of containers, some ships pulled empty containers back to China without waiting for loading, which increased the transportation cost and caused the shipping rate to rise. In the case of the superposition of various costs, the freight rate increases.
(Shipping rates rising rapidly)
In order to protect domestic industries, countries are increasing imports tariffs of finished products, but they have adopted great preferential tariff policies for raw materials and mechanical and electrical products with high technology that cannot be produced.
Taking Egypt as an example, in order to meet the domestic market demand and protect the domestic industry, Egypt encourages the import of raw materials (especially raw materials with a low degree of processing), primary products, and mechanical and electrical products with high technology. These products generally have tariffs below 5%. but the tariff on imported cables and other products is as high as 20%.
At this stage in China, the development of the cable industry is slowing down, and cable factories are gradually starting to transform. With the reduction of production, the price of export finished cables will gradually increase. For enterprises importing wires and cables from China, the import cost will continue to increase, and the competitiveness will decrease.
(map:“The Belt and Road Initiatives” promotes regional development)
With the proposal of “The Belt and Road Initiatives” , the Middle East, South Asia, West Asia, Central Asia, North Africa, and other regions have entered a stage of rapid development of industrialization and urbanization, and the demand in the field of power and construction has gradually expanded, which will be a development opportunity for cable companies.
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