Global trade recorded a significant improvement, which is supposed to be greater during the current year, driven by the economic recovery, which led to an increase in the cost of imports, especially maritime transport, according to a study conducted by the Euler Hermes Group published yesterday.
Over the course of the year, international trade is expected to grow 7.7 percent in volume and 15.9 percent in value after declining 8 and 9.9 percent, respectively, according to the insurance and credit company’s forecasts.
According to “French”, the study indicated that “the reopening of the economies in Europe and the United States leads to a strong increase in imports from Asia to these two regions, which strongly supports global trade in terms of volume.”
In addition to the increase in demand, companies are facing the need to replenish their stocks, which were largely depleted last year when trade almost came to a halt due to the pandemic.
As a result, the freight transport sector, especially sea freight, is facing difficulty in meeting the needs, which leads to a shortage of containers and an increase in transportation costs, which leads to an increase in the value of trade exchanges that exceed the increase in their volume.
Between 60 and 65 percent of containers have faced delays in delivery since the beginning of this year, compared to about 20 percent, before the crisis, and this phenomenon feeds itself, according to the company itself.
“The sudden increase in prices forces companies to change their inventory management strategies, and therefore they move from the “just in time” model to the “if something happens” model, which obliges them to purchase intermediate goods hastily to protect themselves from increases in prices, Euler Hermes said. New potential in the price.
European companies, especially, are facing difficulties because their stocks were lower than those of their American or Asian competitors. Most affected are sectors where inventory management is more difficult, such as automobiles and textiles, and the company expects cost pressures to continue until 2022 as global trade continues to grow.