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THE shipping industry faces unprecedented challenges, including the fallout from the Covid-19 pandemic, high fuel costs and global economic slowdown, say top Philippine shipowners, reports the Manila Times.
Patrick Ronas, president of the Philippines' Association of International Shipping Lines, told a television audience said that there was a sudden drop in demand for goods, disruptions in supply chains and closures of businesses that hurt shipping volumes during the Covid crisis.
"All of us were affected. Everything was closed down, but we were one of those essential people like terminal operators, truckers and those in the logistic sector who ensure cargo will be delivered," said Mr Ronas.
He said the shipping industry had hoped that cargo volume would rebound to pre-pandemic levels. In the first half of 2023, imports were up by 1.15 per cent, which he saw as a good sign.
The Philippines is heavily dependent on imports, not only of finished products but also of food, construction materials and raw materials.
"We see exports or the commodities carried by ships to be less than last year, which means other countries are not really buying that much. I don't know if they have an oversupply or if their warehouses are full. Cargo volume has not gone up. It has grown but not as much as we expect it," Mr Ronas said.
Uncertainties happening around the world, like the Russo-Ukraine war, have also dampened global supply chains, he said.
"The global economy got affected; inflation shot up to the roof; fuel costs rose; food prices went up. We now see a marginal increase in volumes compared to last year, which is unprecedented. Usually, we get a five per cent increase year on year. This time it's very slow," he said.
The Philippines does not trade much with Ukraine, one of the largest exporters of grain. But, if Ukraine stops exporting, other markets will buy into the markets where the Philippines buys. Supply and demand always come into play.
"We also don't buy rice from India; if there is, it's very little," Mr Ronas said. "If India stops exporting rice, buyers from India will buy more in those markets where we buy, adding that according to recent news, rice prices will go up."
China, one of the Philippines' biggest trading partners, remains central to the shipping industry's dynamics. "We have to manage carefully our relations with China, as most of the products we import, which is about 70 per cent, come from China. The raw materials, food we eat, and even US-brand potato chips, are made in China. We have to tread carefully," Mr Ronas said.
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