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Containerised trade recovered sharply from mid-Q3 onwards, with no signs of slowing down

Maersk makes changes to enhance customer experience
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2020 was a year dominated by unprecedented challenges like irregular manufacturing and buying patterns, disrupted trade environments and lack of predictability. With the COVID-19 pandemic spreading across the world in a staggered manner and in varying proportions, the impact on containerised trade was felt the most in Q2 / 2020 when exports contracted by 34%.

However, societies began to find ways to coexist with COVID-19, and trade gradually moved towards recovering in the second half.

Exports ramped up sharply in Q3, not only recovering from Q2 slump but even increased by 14% year on year. However, the economic impact on consumers led to substantially lower imports, which dropped by 28% as compared to the same period of 2019.

Steve Felder, Managing Director, Maersk South Asia, said “Despite unprecedented challenging conditions, stakeholders across supply chains – from manufacturers to consumers, from government bodies to logistics enablers – all stood up cautiously to fight the pandemic. Without the contribution from all the moving parts in the complex machinery of global trade, the path back to normalcy would not have been possible.”

The Q4 of 2020 (October to December), for the Indian containerised trade also ended on a positive note and grew 13.2% as compared to the same period in 2019. It marked the first quarter where both exports and imports grew.

Exports from India had shown a V-shaped recovery since mid-Q3, whilst imports had remained subdued for a long time owing to low demand in the market. In Q4, this trend changed notably, with exports stabilising at a high level and imports bouncing back significantly by 36.3% over the previous quarter, thus moving the needle for overall trade recovery.

During the year, exports contracted in the first half and increased in the second half, consequently posting a full-year marginal growth of under 1% as compared to 2019. Imports delivered a full-year 14% contraction as compared to 2019.

Building growth in 2021

While the retail behaviours started returning to normalcy in the bygone year. The impact of the trade disruption caused due to the pandemic will have long lasting effects.

The imbalance in exports and imports, where exports recovered much quicker than imports resulted in an acute container shortage in various pockets of the Indian hinterland. Container manufacturing also reduced due to COVID-related shutdowns, and the pent-up consumer demand in North America and Europe ultimately resulted in a worldwide container shortage.

Commenting on the current situation and outlook, Steve Felder said, “The challenges that we face today and the extraordinary situation we are in is not going to last forever. This is a temporary phase that will pass, and we are already on our way towards normalcy. We can see overall trade improving and economies getting back on track. The vaccination drive is picking up pace worldwide, and this is going to be the single most important aspect to bring trade – and life – back to normal.”

Further, he added, “We have also seen an accelerated transformation in the last year – developments that would have otherwise taken several years took just a few months. Continued efforts to increase digitalisation, improve ease of doing business, create favourable conditions for global trade and dedicated investments in improving infrastructure will propel India’s import and export growth in the medium to long term.”

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