The writer is secretary-general of the International Chamber of Shipping
Since the pandemic began, a perfect storm has been brewing in global trade. A combination of excess demand, a shortage of ships and, critically, the mistreatment of transport workers, is placing the world’s fragile supply chains under severe pressure.
The storm is breaking now. Governments must act fast if they are to come through it. Short-term price increases are painful, but shattered supply chains, the symptoms of which we’re already seeing in our supermarkets and restaurants, would be devastating.
The price of moving goods for businesses is up to 10 times higher than this time last year. Demand for physical products boomed after the first lockdowns shifted people’s choices from services to goods. But travel restrictions made it almost impossible to match supply with demand.
The implications for businesses are treacherous. Delays to shipments mean that companies already fear for their Christmas trading period. Governments worry that voters will face empty shelves and higher prices. Without immediate action the problem could persist for years.
The partial closure this month of the Chinese port of Ningbo because of Covid-19 infections is the latest example of shutdowns and congestion at major world ports. The containers that move goods are stranded far from where they need to be. A rise in oil prices has made transport more expensive.
But a significant cause of the crisis has nothing to do with the price of oil or a shortfall in containers. The blame rests with many governments for their negligence of transport workers since the start of the pandemic.
Millions of workers who have kept trade flowing should have been afforded the care and respect shown, rightly, to doctors, nurses, police officers and shop workers. Despite the efforts of industry, this has not happened nearly enough. Instead, facing increasingly harsh working conditions, the most important links in the supply chains — people — are beginning to crack.
Truck drivers sleep in their cabs for two weeks at international borders. Some pilots fly thousands of miles without being allowed to leave their cockpits. Seafarers are stuck on ships far beyond their tours of duty — up to 18 months in some cases — never setting foot on dry land.
Many are leaving the sector, deepening its paralysis. At current rates, merchant shipping alone will see a shortage of 75,000 officers by 2025.
Industry bodies for air, road and sea have said repeatedly that the situation is untenable. The International Labour Organization found last year that governments had acted unlawfully in their treatment of sea transport workers. Pope Francis warned that their needs were unmet. But governments took an ill-advised “out of sight, out of mind” approach. In a shared supply chain, what happens around the world has consequences on our front porch.
The stroke of a pen cannot build new ships overnight, nor would any government expect voters to spend less in order to reduce demands on global supply chains. But the treatment of transport workers can be improved almost instantly.
Introducing “green lanes” to let trucks, ships and planes bypass heavy-handed border controls would help staff and reduce delivery times. Prioritising transport workers for vaccinations and recognising them as key workers would enable crews to rotate and rest. Operating with other governments to ensure consistent treatment of workers who cross borders would cut the red tape that chokes supplies.
Trade is cyclical. Demand will rise and fall as the world emerges from the pandemic. Governments have a chance to avert disaster. If they act out of national economic self-interest, rather than to reduce human suffering, this is dispiriting. But it is far better than not acting at all.
Source: Economy - ft.com
