Global shipping volumes could decline by 10% due to coronavirus outbreak
With retail activity in the developed world grinding to a halt due to the Coronavirus outbreak, global shipping container volumes could decline by 10 percent, media reports quoted shipping liner analysis firm SeaIntelligence Consulting as saying.
At an earlier stage of the coronavirus outbreak, there was no movement of shipping containers from China because of a manpower shortage. Now as China’s shipping container terminals become operational, ports across other parts of the world are facing the prospects of a lockdown.
The fall in demand in Europe and North America is expected to affect cargo movement through shipping lines across the world. According to a Goldman Sachs report, the US GDP could decelerate by a whopping 24 percent in the second quarter of 2020, affecting cargo movement across the world.
Global cargo shipping lines are facing the prospects of a demand shock as the Coronavirus lockdowns lead to a fall in consumption and a global recession. Additional coronavirus restrictions on cargo shipping through the oceans can add to the cargo supply shock for global cargo liners.
According to media reports, global cargo shipping liners including Maersk are facing difficulty in changing their crews who are to be replaced by new crews at the end of their contracts. The International Chamber of Shipping has said that the inability to change crews can seriously affect the flow of trade.
Shipping lines that face coronavirus infections among their crew might be quarantined without being able to unload their cargo at their ports. Port restrictions are also likely to affect the flow of trade. According to media reports, the maritime safety authority of Queensland has ruled that no ship might enter its ports unless 14 days have passed since its last call at another port. However, one of Europe’s major ports – the Antwerp Port in Belgium has announced that it remains 100 percent operational after a meeting of its coronavirus taskforce. Antwerp port also reported that it has not recorded any fall in cargo volumes.
The port of Rotterdam in the Netherlands, one of the world’s largest ports, has said that it will remain fully operational while following strict Dutch government regulations.
Earlier this month, Dubai ports operator DP World had told the media during its earnings announcement that the global trade outlook looked uncertain due to the coronavirus outbreak although the company was well-positioned to meet the challenges of the outbreak in the short term.
DP World's chief financial executive had said on March 11 that data from the first eight weeks of 2020 showed "weakness" in the sixth and seventh weeks because of disruptions and factory closures in China. However, he added that data from the eighth week suggested a "significant bounce-back." The chief financial executive said that the company would have a better idea of the coronavirus impact in April.