In the Review of Maritime Transport published by the United Nations Conference on Trade and Development (UNCTAD), its authors focused on how pandemic-related disruptions have affected and continue to affect international commercial contacts and the freight industry in general, as well as what to expect in the post-COVID era.
As more than 80% of global merchandise trade is carried out by sea, and most of the world’s merchandise trade is carried out on cost, insurance, freight (CIF) and free on board (FOB) terms, the pandemic has legal implications for many, experts say. closely related commercial contracts. Whenever performance of a contract is disrupted, delayed or rendered impossible, legal consequences and claims arise, involving complex jurisdictional issues and resulting in costly dispute resolution.
The commercial risks posed by the pandemic should be fairly distributed through properly worded clauses in the contract, the authors of the review say, but the terms may vary depending on the type of contract and the balance of power in the negotiations.
Governments, they believe, can also provide support, for example by strengthening formal and informal dispute resolution mechanisms and considering introducing mandatory controls on container demurrage charges in affected ports.
Among other things, the pandemic has led to a surge in e-commerce for containerized consumer goods. Even as the pandemic eases and restrictions are lifted in the global economy, these trends continue, the report notes.
“Shippers, retailers and value chain managers are increasingly adjusting their operating models and rethinking their logistics systems. For example, large shipping companies are expanding their reach to areas such as air freight, last mile logistics and e-commerce. For example, in 2021, the world’s second-largest container liner shipping company, Maersk (note by SeaNews: at that time – the first) acquired various e-commerce logistics companies, including an innovative cloud-based logistics company specializing in on technological solutions for organizing warehouse operations in the framework of electronic commerce between enterprises and consumers in the fashion industry”.
Delivery times are critical in e-commerce, and shipping companies and port operators need to speed up their service delivery in order to remain competitive while offering customized services, the survey notes. This will require changes in transportation patterns and port operations, as well as expansion of warehouse space. Going forward, digital tools enabling e-commerce expansion, collaboration and data sharing will be essential to reap the full benefits of growing e-commerce.
Digitization, the authors of the review emphasize, increases transparency, speeds up customs clearance, allows for risk management and processing of documents before the arrival of goods, and also provides the opportunity to increase the level of response and flexibility within the relevant processes. “If the COVID-19 problem had arisen decades earlier, the consequences of disruptions would have been much more severe.”
Trade and transport are changing under the influence of digitalization. “Radical changes are accelerating the use of technology to address the complexities of transportation planning and supply chain operations. In the post-COVID and post-war era, greater expectations of fast delivery put efficiency, optimization, reliability, transparency, resilience, predictability and sustainability in the first place. In order for shipping companies to function in this new environment, they need to find innovative business models and use more up-to-date digital technologies.”
Shopping using digital technologies contributes to a significant expansion of trade. However, other technologies, such as automation, which can reduce the need to move production abroad to take advantage of cheaper labor, are likely to dampen trade flows.
In any case, maritime transport and trade will have to change and adapt to technology, and an important part of this process is the protection of information and communication systems and infrastructure from constantly emerging cybersecurity threats. In this regard, governments and international organizations should make every effort to close the digital divide in the field of transport and logistics and ensure that developing countries can take advantage of digitalization, the authors of the review conclude.