The crisis in the global shipping industry has been largely on the back of uneven post-Covid recoveries of the major importing and exporting countries, according to a report by Drip Capital.
Small and medium businesses (SMB) around the world contribute to over 25 per cent of the $18 trillion maritime trade, said the report, adding that Drip Capital observed that this sector has been going through a more profound and widespread crisis since the onset of the Covid-19 pandemic and the resulting economic contraction.
The economic downturn due to Covid-19 led to the plight of the sector. Be it the supply chain disruption, the shortage of shipping containers to skyrocketing freight costs over the last year, many elements have collectively increased the woes of the SMBs across the globe.
Titled 'Global Shipping Crisis: The detrimental impact of the rising tide of freight costs on SMBs', the report said: "While every exporter and importer felt some degree of the brunt from the economic contraction, the most heavily affected were the SMB traders of the world."
Noting that China is the largest exporter in the world, with 16.1 per cent of global exports, the report said that when Covid-19 hit this global trade powerhouse, many unfortunate events started unfolding for the shipping industry.
"The shipping crisis is a consequence of the uneven post-Covid-19 economic recoveries of the world's largest importing and exporting countries. The novel coronavirus has hit the world with multiple waves and new variants," said the report.
However, the difference in the degree and level of its impact on each country meant everyone around the globe experienced lockdowns and the subsequent easing of restrictions at different points in time, it added.