Inflation in Transportation Will Last at Least Another Year

'By the end of the year, transportation prices will stabilize.' This was the forecast from entrepreneurs a few months ago, whose businesses depend on the import and export of goods and services. However, as things stand, prices are not only not stabilizing but continue to rise, so the forecasts for stabilization remain, but not for the end of this year, rather for next year.

Dynamic changes are currently occurring in global logistics, to the extent that no one dares to predict anymore. Every mode of transportation, whether it is road, rail, air, or sea, has its own philosophy of inflation and its causes, that even seasoned economists cannot find logical explanations for why this is the case. Interestingly, demand during the pandemic has not changed much compared to 2019, but inexplicable situations are occurring in supply that leave entrepreneurs facing a fait accompli and numerous dilemmas. The price increase arises from a controlled shortage of supply, rather than increased demand compared to 2019. However, besides prices, a major problem is the reliability of delivery. Those who have exported and imported until now must now include many more parameters in their business calculations than before, pay more, and book transport up to six months in advance. And even then, there is no guarantee that in the end they will not pay five thousand dollars more for capacity reservation and a guarantee that their goods will arrive at the destination on time.

This is a golden age for carriers, especially shipping companies, considering that 75 percent of transportation occurs by sea, and over 80 percent of trade is on the China-Europe route. According to reports from professional global logistics portals, transoceanic carriers achieved the highest profits in history last year, and 2021 will even be better for them. The global logistics company Alphaliner summed up last year’s earnings of the nine largest container shipping companies in the world, such as Maersk, and arrived at a figure of as much as 15.8 billion dollars in profit, which was 4.8 billion a year earlier. This means that during the pandemic, the profits of the largest players tripled. 

What are the current prices of all types of transportation in Croatia and what awaits us in the future, transportation leaders analyze in the new printed and digital edition of Lider.

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