According to a well-known analyst the coronavirus could see a total loss of 17m teu this year, reports Splash 247.
Potential drop in 2020 trade
A well-known analyst said that with cases of coronavirus outside China speeding up, container shipping experts have to rethink the full scale potential drop in the trade for 2020. The analyst suggested that the disease could see a total loss of 17m teu this year.
Latest data shows there are now 128,343 confirmed coronavirus cases and is still growing. It is now 37% reported cases outside of China where the disease started.
Loss for liners
Lars Jensen from Copenhagen-based SeaIntelligence Consulting wrote regarding the potential 17m teu loss for liners and a consequent 80m teu loss for the world’s container terminals.
Forecast based on 10% drop in business
Jensen made his forecast based on the industry suffering a 10% drop in business, as it did in the wake of the global financial crisis from 2008.
A bounce back year
Andy Lane from CTI Consultancy backed the potential 10% shortfall, but reckoned the 80m teu figure for ports was around 10m too high.
Also citing the 2008 financial crisis, Lane suggested the bounce back next year could be phenomenal.
Lane said what was seen after 2008 was a huge spike in growth in 2010 to well beyond 2007 levels, and the effects of the current issue will ease faster. Lane added, “So it will be a tough year in 2020 for all, but maybe a nice 2021 ahead.”
No 10% drop!
Peter Sand, chief shipping analyst at shipowning organisation BIMCO, was more circumspect about the 10% figure and said, “I don’t think that we will see a drop of 10%.”
Coronavirus and financial crisis
“Fingers crossed, the coronavirus will eventually stop, that point in time is likely to be faster than the financial crisis stopped terrorising the global economy. A cautious estimate could be anywhere between -1 to -5%.”
Unprecedented nature of the disease
Splash columnist Kris Kosmala, a partner at supply chain advisory Click & Connect said, any predictions will most likely be proven wrong, due to the unprecedented nature of the disease.
Kosmala said, “Any comparison to the financial crisis of 2008 is not good guidance, as trade and trade financing are not ceasing.”
According to Kosmala:
- Consumers might be reluctant to venture out, but temporary quarantine measures, ought not to equate to collapsing banks and credit crunch caused by slow reacting central bankers.
- The ongoing trade wars could ultimately be the biggest drag on container volumes this year, not coronavirus.
- The effects of the ongoing trade wars and the epidemic overlap, will have a hard time distinguishing what is dropping as a result of what.
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Source: Splash 247