Global shipping has taken an important hit because of the coronavirus, as more tonnage of container ships remain idle around the world, in comparison to the global financial crisis. As a matter of fact, docks in China are clogged as shipping containers or iron ore arrive.
With China trying to maintain an economy damaged by the coronavirus epidemic, one of the biggest obstacles lies in its half-paralyzed logistics industry, the New York Times reports.
In fact, daily charter rates for tankers and bulk freighters have fell by over 70% since January, due to the fact that China buys less oil, iron ore and coal, according to Tim Huxley, the chief executive of Mandarin Shipping.
Currently, ports and their customs offices are operating fairly smoothly, however the country is facing difficulties in getting goods to and from the docks.
This slowdown in China is already affecting the US. Namely, in January, container volume fell 2.7% at American ports, with officials expecting much bigger declines as the virus crisis continues.
China has announced several measures in the last few days, in order to get the country’s trucking fleet and ports working again. But, it is not certain when these activities will return to normal.
Commenting on the emerging situation, Cary Davis, an official with the American Association of Port Authorities, stated that the overall economic impact of these types of emergencies is often in the tens of billions of dollars. As Cary Davis explained, the coronavirus outbreak could eventually reduce cargo volumes at US ports by as much as 20% or more on a year-on-year basis.
