The shock wave of the surge in maritime freight costs resonates so strongly that the repercussions on inflation are almost immediate. According to analyses, significant effects of freight rate variations on the CPI are noted. Worse still, these consequences persist and could last for another year.
For a country like Morocco, which remains open to international trade, maritime transport is of capital importance. Indeed, it remains the main means of transport for foreign trade, with a contribution close to 95%.
Thus, as a country with significant trade integration and a predominance of maritime transport in international trade, the price structure could be sensitive to changes in costs. It is common knowledge that supply chain disruptions following the pandemic crisis have increased ocean freight costs to an all-time high.
The political tensions triggered shortly after did not help matters. However, with all these disruptions, what impact does ocean freight of goods have on inflation? To answer this, Bank Al-Maghrib published a working document bringing together expert analyses. It appears that the impact on the consumer price index (CPI) is undeniable.
Impact measurement
According to estimates from the VAR method, which integrates the World Bank Oil Price Index and the Non-Energy Commodity Index, significant and persistent effects of changes in freight rates on the CPI, core inflation (IPCX) and tradables inflation (IPCXE) are observed. Indeed, an increase of 100 percentage points in the Harpex index leads to an increase in the CPI whose peak is 0.3%, with persistent effects that can last up to 8 months.
However, the effects are more marked for the IPCX and the IPCXE, with respective increases of between 0.4% and 0.5% and greater persistence, peaking at almost a year.
As for the Baltic index, the effects of increases on inflation are generally less pronounced. Unlike the Harpex index, the Baltic focuses primarily on commodity shipments. Certainly, the impacts are significant on prices, but remain less severe compared to products intended directly for final or intermediate consumption.
Nevertheless, it would seem appropriate, on the one hand, to deepen the analyzes of the impact of maritime transport costs specifically on the prices of imported products, in particular through the development of an index dedicated to these products.
This index could offer a global vision of these impacts, while making it possible to distinguish the different categories of imported products, whether final or intermediate consumption. On the other hand, it would be relevant to have specific indices reflecting the evolution of maritime transport costs of goods in Morocco.
These indices would help to measure more precisely the impacts of freight rate fluctuations on inflation and export competitiveness. They would also help operators to better assess the prospects of this market and to benefit from better visibility on the conditions of contracts with international companies. It should be noted that the cost of maritime transport generally accounts for around 5% of the value of goods imports, while air and land transport only account for less than 1%.
However, in Morocco, despite the exceptional increase in imports at the end of 2021, the share of sea freight costs also continued to grow, reaching 6.5% of the value of goods in the fourth quarter of 2022. Transport costs can have a direct impact on import prices, as well as an indirect effect on inflation due to the additional costs borne by businesses.
Fleet and maritime infrastructure
To achieve this, colossal investments have been undertaken to adapt maritime infrastructure. Morocco has 12 commercial ports offering operators a total annual capacity of nearly 243 MT.
Paradoxically, the capacities of the fleet under the Moroccan flag have declined sharply, going from 593 thousand deadweight tonnes (mDWT) in 1992, to 387 mDWT in 2005, and finally to only 156 mDWT in 2022. Currently, Moroccan companies own 93 ships.
This decline results from a combination of several factors, notably the inability of local companies to face competition from large international operators after the liberalization of this sector in the wake of the commercial opening strategy.
Maryem Ouazzani / ECO Inspirations
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