As the shipping industry goes through an unprecedented situation that started in the beginning of the COVID-19 pandemic, things will get worse before they get better, Vice President of global ecommerce at DHL, Nabil Malouli, told Al Arabiya in an interview.
An “imbalance between supply and demand started to create shipping rates to go higher… and then we saw a sequence of events that has created even a higher situation in terms of like backlog and congestion,” he said.
“Labor shortage, capacity increase in terms of demand, and also the fact that we have a much lower airfreight capacity across the globe due to the fact that many of the airlines are not operating yet internationally at the level they were operating to pre-pandemic,” leading to a combination of factors creating an imbalance, Malouli told Al Arabiya.
According to the VP, this had led to a much higher demand and supply in the marketplace, which is consequently increasing the rates.
Expectations
Q4 is the “peak season in shipping,” Malouli said, as it has the highest demand in terms of volume and consumption across the globe.
People should expect shipping lines and airlines to increase their prices during the month of October, however he expects things to balance out by February or March of 2022.
“I don’t think everything is going to be resolved by February or March. But at least we would have passed the peak of demand, which is now really… We are I think at the worst stage,” Malouli told Al Arabiya.
The Middle East is a region that depends a lot on import, according to Malouli.
“The Suez Canal situation has created… a challenge in the planning of vessels. And there is still congestion,” he said, adding that he expects more delays going into the Middle East, and prices going up for the trading.
E-commerce activity
Malouli said consumer spending towards material things is going to slow down, compared to last year when people were stuck at home during the COVID-19 lockdown.
“But every number we see from any organization that has been one of the winners of the [COVID-19] pandemic has seen an increase in e-commerce and even in the markets where the pandemic has been under control and where stores are open already for a couple of months, we still see very strong demand in e-commerce, and that is going to be even more evident going to the holiday season,” he added.
Malouli also said, however, there won’t be a slowdown of e-commerce adoption.
“I think we are going to see actually an acceleration; I think the convenience of online purchase is one of the primary reasons behind this,” Malouli said, adding that people got used to the convenience speed of e-commerce.
Source: Al Arabiya