The Shipping industry is currently going through a crisis as new variant and pricing options appear on the market. The Delta has been having an all-round negative effect, but it appears that omicron may be worse for business than its predecessor - at least in terms of affecting fuel consumption rates among European shippers so far.
A halt in international travel disrupts the global economy, as countries stop issuing visas and airspace becomes restricted. The loss of jet-fuel demand combined with a reduction on tanker shipping due to reduced production from OPEC+ is not good news for tankers; anything slowing down full recovery will have that effect!
In a time where shipping is struggling to stay afloat, container ships have been booming. Despite some moderate fluctuations over the past few weeks and months due in part from COVID’s effects on marine fuel prices (which impacts tanker rates), spot market cargo carrier agreements between maritime carriers are holding steady at 6 times more expensive than late November 2019 levels!
The introduction of COVID had a devastating effect on container shipping demand when production areas such as China or consumption regions like the US and Europe were locked down. Beyond that, its effects are highly positive because it shifted consumer behaviour from services (consuming) to goods which helped make up for port congestion during this time period.
Asked about the possible effects of omicron, Vespucci Maritime CEO Lars Jensen replied: “We don't really know how it will impact us but there are two key things going on right now. First off is that with demand in America being pushed down because people stopped using services and switched over to buying goods instead; this has caused container volumes traveling between Europe and North America increase substantially."
As of now, the shipping industry is in a state that has been described as "okay." Dry bulk and gas have had good years with increased market share for both types. It seems like spot rates are at an all-time high too!
