- Global container shipments are set to fall 30% in the next few months, as retailers ask shipping companies to push back deliveries.
- Shipments fell about 15% this year amid the coronavirus pandemic.
- The slump is a setback for shipping giants, which started the year strong as healthy trade volumes allowed the industry to boost rates.
- Inbound containers to the Port of Los Angeles plunged 26% in March, Singapore’s container throughput dropped to its worst reading since August.
- Some containerships have been running at only 20% capacity and numerous sailings have been canceled.
According to the head of an industry group, global container shipments may be dragged down by 30% in the next few months as warehouses are getting full of goods that retailers are asking shipping companies to push back deliveries, reports Bloomberg.
Impact of coronavirus pandemic
International Chamber of Shipping Chairman Esben Poulsson said shipments fell about 15% this year amid the coronavirus pandemic.
He said that the second-quarter declines when compared with last year, will depend on how much governments reopen economies.
Delay taking delivery
He added inventories of goods like apparel, textiles, white goods, are full and receivers of these goods ask shipping lines if they can store these goods for a period of time or slow their ships down or basically delay taking delivery.
Setback for shipping giants
The slump is a setback for shipping giants such as Cosco Shipping Holdings Co. and Ocean Network Express Holdings Ltd., which started the year strong as healthy trade volumes allowed the industry to boost rates.
The virus outbreak has forced shoppers to stay home, crimping retail sales in the biggest consumer markets.
Shipments
From Asia to North America and Europe
According to Ocean Network Express Chief Executive Officer Jeremy Nixon, forward bookings for shipments from Asia to North America and Europe have slowed for April and into May.
From North and Latin America, Europe and Oceania to Asia
Nixon said, shipments of products from North and Latin America, Europe and Oceania to Asia are still strong.
Restrictions to contain the outbreak
Added to lower volumes, restrictions aimed at containing the outbreak also have hit the industry.
Poulsson said that ensuring seafarers boarding and transferring onto ships amid port restrictions and canceled flights remains a major challenge.
Container throughput drop
- Inbound containers to the Port of Los Angeles plunged 26% in March from a year earlier,
- Singapore’s container throughput dropped to its worst reading since August.
- Hong Kong’s measure fell below average again after a brief respite in February.
Sailings canceled
Tim Huxley, chairman of Mandarin Shipping Ltd. said, “Some containerships have been running at only 20% capacity and numerous sailings have been canceled.”
“Our five container ships have certainly been carrying less and we have also had to endure some waiting time between employment.”
Shutting down economies
Financial pain from major economies shutting down is rippling across the supply chain, said Lee Klaskow, a senior analyst for logistics at Bloomberg Intelligence.
“The dry bulk, ro-ro and containerliner industries will be the most impacted as the service industries halt to a stop and manufacturing capacity lays idle.”
Regular sailings reduced
Nixon said to react to lower exports out of Asia, ONE has reduced regular sailings from the region to Northern Europe, the Mediterranean and North America.
A major question for the industry now is when demand might rebound, and whether global trade will be permanently altered by the pandemic.
“In the long term, we still see strong business requirements for global trade and container shipping,” Nixon said. “But the challenge will be what is the growth after coronavirus.”
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Source: Bloomberg
