Following COVID-19’s impact on the shipping industry, the British Ports Association has been in close contact with the government, assessing the impacts, providing a summary of which sectors have been mostly affected.
Specifically, the BPA’s Policy & Economic Analyst, Phoebe Warneford-Thomson has been assessing the impacts and she has prepared a snapshot of activity below.
Ports
Ports are already facing challenges, from both a downturn in customer activity, as well as pressure to offer rent holidays and reduce harbour dues.
Early figures show that international trade and EU markets activity has declined significantly. January’s data show exports down by 3.2% to EU markets and by 7.8% to the rest of the world. Though, only when the crisis is over will the figures reveal the true extent of harm caused to industry. Shipping specialists have however forecast a 20% reduction in world trade in the first quarter of 2020 and six million few globs container movements in the same period.
Ferry and Roll-on Roll-off (Ro-Ro) freight
Several ferry operators are reducing passenger capacity and the number of sailings, in response to the shut-down of passenger movements and economic activity. It is stated that some roro operators have experienced relatively healthy freight volumes, particularly with fresh, produce, foods, medical, cleaning products and other grocery supplies. Yet, the government’s lockdown had a negative impact, as roro freight volumes have been declining as demand from non essential business and shops decreases. Indeed for some port operators, this has resulted in storage opportunities and/or headaches.
Concerning cars and automotives, the closure of vehicle manufacturing plants in Britain and Europe has seen a dramatic decline in finished trade car imports/exports. This has also impacted Ro-Ro and container freight demand for components and materials.
Dry Bulks
The majority of dry bulk cargoes were affected by the lockdown. However, agricultural products and animal feeds will remain stable in the following weeks, as farming and food production continues, according to the forecast.
However one notable cargo that has flourished is the paper pulp which has been in high demand for the toilet roll and tissue manufacturers. Some ports have reported record quantities although there remain questions as to how agile the timber and pulp producers will be at sustaining this increase in demand, especially given potential consumer stockpiling.
Liquid Bulks
There has been a substantial impact in deflated oil price and a substantial reduction in industry and consumer demand in fuel. This is also leading to storage demand for certain fuels such as aviation jet fuel. On the one hand, chemicals for manufacturing are presenting a slight decline, on the other hand, additional liquid bulks, as orange juice have remained plentiful across Europe and separately in terms of port activity, some tanker owners are talking to certain ports about ship layups and storage.
Containers
After the initial much-publicised deep-sea container traffic slowdown in February and March (which largely import driven) saw a reduction in throughputs of between 25% – 30% in early March following the effective shutdown in Chinese manufacturing and exporting.
Yet, keeping in mind that China has been fully active again, there appears to be an abundance of traffic being shipped from Asia to Europe which will start to arrive in the coming weeks.
There are now concerns in the European container sector that with the shutdown of UK and our neighbouring economies and the dramatic drop off in demand for non-essential products, much of this cargo could be held up
… Phoebe Warneford-Thomson added.
One cargo that has grown substantially is finished toilet rolls and some ports have reported a 400% increase in this cargo arriving in short-sea container form the Netherlands. Also, refrigerated units carrying products such as bananas have increased at a healthy level although across the globe the reefer containers themselves are somewhat in short supply as many are being used for storage.
Recreation and Tourism
Practically all cruise sailings and port calls are cancelled until the end of May at the earliest. Some ports are now talking to cruise operators about calls in the late summer and the early autumn, but it would appear there could be quite a lasting impact on consumer bookings, particularly for the largest cruise ships. However, some ports have at least managed to gain some business from cruise operators from layups in their ports.
Offshore energy
The offshore sector has been affected by the pandemic, as well. The decline in the oil price continues to disrupt the sector. Many offshore oil and gas companies have ceased extraction activity meaning some port cargo and support activities are falling substantially however certain ports who accommodate rigs and offshore support vessels have seen varying increases in inactivity.
Renewable energy is also important for the country and ports and most marine-related activities continue, although reduced. Some offshore wind construction schemes have also been impacted as have some scheduled wind farm maintenance routines but this appears to be quite short term.
Fishing
Another sector that has taken a hit is the fishing industry. While some white seafood catches remain healthy many ports with smaller fleets and landings that are exported to Europe have seen a dramatic slowdown in activity.
Employee Absence
Following the Government’s recent advice about isolation, there was predictably a general increase in port employee absence rates as people followed national advice. The initial spike has calmed somewhat and port operators this week were reporting modest levels of absence rates, still largely for people self-isolating although some who were, unfortunately, suffering from Coronavirus.