Crew Change Crisis
Just as we thought travel restrictions are easing, the Omicron variant is already making a shift in crew change operations. For instance, Singapore has already suspended crew change and vaccination of seafarers with recent travel history to Botswana, Eswatini, Lesotho, Mozambique, Namibia, South Africa and Zimbabwe in the previous 14 days to arriving in Singapore. Additionally, at least 56 countries had introduced travel restrictions over the latest strain of the virus.
However, major transport companies believe that these ‘knee-jerk’ reactions are putting the supply chain at a greater risk of collapse. Speaking more on this in MarPro, Willie Walsh, Director General, IATA said: “After nearly two years of dealing with COVID-19, we should have progressed beyond these knee-jerk, uncoordinated, Pavlovian-like responses.”
Positive Container Shipping Rates
On the other hand, the Omicron variant might bring positivity to container shipping rates. While there is some risk, Freight Waves reported that the effect might be highly positive as the shift from services to goods continue. In the report, Clarksons Platou Securities commented: “With omicron now causing more restrictive travel measures, consumer spending habits may remain engaged in the favour of the container shipping sector. Several liners had already taken a view that strong market conditions will persist into 2022, and this could be extended further … [with] a potentially longer run.”
Even Lower Oil Demand
If the variant leads to further lockdowns, Rystad Energy predicted that oil demand could fall to to a level of 94.2 million bpd in January 2022. Claudio Galimberti, Senior Vice President of Analysis at Rystad Energy, commented: “The likelihood of increasing lockdowns in the coming months has risen dramatically due to the new Omicron variant, and this will undoubtedly impact global oil demand. Given the early stage of the variant outbreak and the unknowns related to contagiousness and vaccine efficacy, we can only hope this scenario turns out to be a false alarm.”
