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The rise in shipping rates threatens the recovery of the global economy, says UNCTAD

Shipping containers are unloaded from ships at a container terminal in the Long Beach Port of Los Angeles in Los Angeles, California, the United States,  -ril 7, 2021. REUTERS / Lucy Nicholson / File Photo

LONDON, Nov. 18 (Reuters) – A surge in container freight rates poses a threat to global economic recovery, with small countries dependent on sea shipments likely to be hardest hit by spikes in import prices, the company said UN agency UNCTAD on Thursday.

An increase in demand for consumer goods during the pandemic has created major delivery bottlenecks around the world that have impacted the supply of container ships and boxes used to transport cargo.

Shipping and port officials expect the global supply chain disruptions to extend through 2022.

“The current surge in freight rates will have a profound impact on trade and undermine the socio-economic recovery, particularly in developing countries, until maritime traffic returns to normal,” said UNCTAD Secretary General Rebeca Grynspan.

In its review of maritime transport for 2021, UNCTAD said that if the current surge in container freight rates continues, it could increase global import price levels by 11% and consumer price levels by 1.5% by 2023.

“The impact is expected to be greater for smaller economies that rely heavily on imported goods for much of their consumption needs,” it said.

UNCTAD said actors in the maritime supply chain, including container lines, ports, inland transport providers, customs and shippers, should “work together to share information and make maritime transport more efficient”.

“In view of this cost pressure and the ongoing market turmoil, it is becoming more and more important to observe market behavior and to ensure transparency when setting tariffs, fees and surcharges,” it said.

Reporting by Jonathan Saul. Ad -tation by Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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