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SAFETY4SEA

Commodity and container shipping impacted by coronavirus

by The Editorial Team
February 7, 2020
in Shipping
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The coronavirus outbreak is seriously affecting the container and commodity industries as many shipping lines re-route their cargoes and reduce calls to Chinese ports, setting the scene for months of delivery delays ahead, Reuters reports.

BIMCO’s Peter Sand has stated that the shipping industry will be temporarily affected by the virus,  because of the shutdown of the majority of the transport system, which consequently limited the consumption of oil, refiners have reduced crude runs across the board, while demand declined and is unlikely to return to boost shipping demand after the crisis is over.

Container Shipping

The negative impact on the industry also comes after China decided to extend its Lunar New Year holiday period until Feb. 10 has compounded logistical complications, despite its ports staying open. China is a vital link to the container sector, transporting everything from fresh food to phones and designer clothes as well as industrial parts.

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Shipping companies as Maersk, MSC and CMA CGM have already announced that they have reduced their calls to China.

It is also reported that regular schedules have been also hit by truck and port workers in China stuck at home or away from their places of work. Warehouses around dock areas in China are not fully working. This has led to ships being diverted from China to ports in South Korea.

A Busan port official quoted to Reuters that the port has already seen a spillover with container capacity at 78% and could rise further from its usual level of 70%, adding that if container level rose to 80% it would be challenging to run the port efficiently.

In addition, Lasse Kristoffersen, chief executive of Norwegian shipping group Torvald Klaveness, stated to Reuters that 25% of its container fleet was affected as sailings were canceled.

Similarly, U.S.-based shipping industry consultant Jon Monroe, whose company is active in China, added that blank sailings in February were higher than usual.

Commodity Shipping

Following the path of the container industry, the commodity shipping is also experiencing the impact of the coronavirus outbreak.

Bloomberg reports that the virus in Asia’s top economy, the world’s largest importer of iron ore, severely affected raw material market and companies that transmit goods across the oceans. Also, freight rates have swooned amid gathering indications that demand for cargoes will slump.

Speaking to Bloomberg Television, Rahul Kapoor, global head of commodity analytics and research for maritime and trade commented that the virus will hit China’s growth by as much as 1%, which is negative for shipping demand.

The Baltic Dry Index has collapsed to the lowest level since 2016 as the crisis in China has escalated and signs of disruption have emerged around the world. Among them, China’s copper buyers are asking Chilean miners to delay shipments due to port shutdowns.

Commodity and container shipping impacted by coronavirusCommodity and container shipping impacted by coronavirus
Commodity and container shipping impacted by coronavirusCommodity and container shipping impacted by coronavirus
Tags: containershipsCOVID-19shipping industryshipping market
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