The pandemic is having an unprecedented impact on the maritime shipping industry

COVID-19 has caused a new and unprecedented impact on the global supply chain, particularly on the port and shipping industry, as discussed in the document "Ports and Shipping in the COVID-19 Pandemic" by T. Notteboom, AA Pallis and J-P. Rodrigue and published by PortEconomics.

Given this new scenario, shipping lines seem to have adjusted their strategies to cope with the recent and significant drop in volumes. Freight rates didn't fall in the first half of 2020 due to capacity management and pricing. Despite the crisis, the shipping lines and their allies tried to protect the integrity of the network and resorted to blank sailing to address the imbalances between supply and demand.

In the longer term, the expected slow economic recovery and the ongoing gradual reorganization of the global economic production system (offshoring and reorientation) could push shipping companies to rationalize services on the main east-west shipping routes, reinforcing the intra-regional maritime transport networks at the same time.

Ships and TEUs in ports
In February 2020, the supply crisis in China led to the first wave of service cancellations. In mid-March, the whole picture changed when the supply resumed in Asia, but a demand crisis took place in the European Union and North America due to total and partial lockdowns. In some ports, the number of calls in April, May and June 2020 fell by between 20% and 50%.

Despite the sharp decline in ship calls, container volumes at ports have generally less affected; however, significant differences can be observed between the largest container ports, based on year-on-year growth in TEUs in the first half of 2020: -6.8% in Shanghai, -1.1% in Singapore, -17.1% in LA, -6.9% in Long Beach, -7% in Rotterdam, +0.4% in Antwerp, -9.1% in Valencia, -20.5% in Barcelona and -29% in Le Havre.

Connectivity
The impact of the pandemic on maritime shipping and connectivity varied widely per region. Europe was substantially hit. In the United States, ports on the west coast observed significantly negative trends, particularly in the second quarter of 2020, but the impact was not as severe as that on the ports of the east coast.

In Central and Latin America, container ports showed signs of strength, as their connectivity levels with maritime shipping lines remained stable and, in some cases, improved during the first days of the pandemic.

 

Source: mundomaritimo.cl


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