- Falling volumes and canceled sailings hit container shipping due to the virus have reached $350 million a week.
- The cancellations amount to 198,500 containers in the trans-Pacific market, Europe and Asia amount to about 151,500 boxes.
- Dry-bulk shipping will be the hardest hit of the shipping sectors because of weak demand from China’s factories for raw commodities.
According to an article published in The Wall Street Journal and authored by Costas Paris, diminished trade attributed to coronavirus has reached a staggering $350 million a week.
Diminishing trade
The decrease in trade volume, cancellation of shipping and placed under quarantine have been attributed to coronavirus. The total loss in a week has been estimated to be $350 million a week ranging from lost volumes, carriers and bulk commodities.
Moreover, around 350,000 boxes have been removed from global trade networks since the disease broke out last month, according to Denmark-based maritime data provider Sea-Intelligence.
China limping back to normalcy
After taking a hit, China is slowly limping back to normal as its industrial sector resumed production but many factories remain closed due to fear of virus infection coupled with travel bans.
Port officials and tug operators at the ports of Shanghai and Hong Kong, two of the world’s busiest container shipping gateways, said only about half of dockworkers returned to work.
“Truck drivers spent the night in their vehicles waiting to unload cargo to ships that didn’t show up,” said Li Chen, a tug captain for Shanghai Salvage Co., a state-run maritime services operator. “There are delays in processing cargo with customs still on skeleton staff. The usual rush after New Year isn’t here. A lot of people fear for their jobs with business falling so much.”
Halt in trade
Additionally, around 21 sailings between China and the Americas have been canceled so far, according to Sea-Intelligence, along with 10 cancellations in the Asia-Europe trade loop.
The cancellations amount to 198,500 containers in the trans-Pacific market, while cancellations between Europe and Asia amount to about 151,500 boxes.
U.S. retailers depend on those imports to replenish inventories heading into the spring, but the nation’s largest retail group is predicting sharply diminished shipping volumes over the next few months.
Global Port Tracker report
- The monthly Global Port Tracker report issued by the National Retail Federation and Hackett Associates projects inbound container volumes at U.S. seaports in February will be down 12.9% from a year earlier and off 9.5% in March from a year earlier.
- The report also lowered its forecast for container imports into the U.S. by 370,000 containers over February and March from estimates made before the coronavirus outbreak.
The U.S. turns towards other countries
“U.S. retailers were already beginning to shift some sourcing to other countries because of the trade war, but if shutdowns continue, we could see an impact on supply chains,” said Jonathan Gold, the NRF’s vice president for supply chain and customs policy.
Dealy in orders
Shipbroker Clarksons PLC said deliveries of new tankers, bulk ships, and container ships would also likely be delayed over the coming months because of the slowdown from the coronavirus. Chinese shipyards have 960 vessels in their order books worth a combined $27 billion.
“We are working at around a quarter of our capacity,” said an executive at China State Shipbuilding Corp., which employs more than 300,0000 workers at various facilities. “The supply chain for some yards has been seriously impacted. Spares aren’t being delivered and engineers are still at home. Chinese New Year pushes back work scheduled by up to four weeks. Coronavirus is adding another three weeks of delays,” he said.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: TheWallStreetJournal
