Effect of Corona Virus in the Shipping Industry
Coronavirus disease is a serious worldwide issue causing a major impact on the worldwide economy. This widespread epidemic is not only limited to China but it has outgrown into the global sphere affecting international tourism, trade & shipping. International shipping is one of the majorly affected industries amidst this outbreak.
The major global epidemic- Coronavirus has already taken a big toll on the industrial sectors as it is really affecting the international trade and shipping channels in various ways. In terms of accessing the effects, the shipping industry has seen a widespread impact on the operations causing the decline in international trade activities across the globe.
As most of the activities are also operated from Chinese ports, the direct effects of roadblocks due to virus severity can be traced in the logistics and shipping industry. It has resulted in a serious economic scenario declining the major trade exports and imports worldwide.
The container shipping industry is also operating at a low level as most of the logistics service providers have scaled down their operations amidst the decline in the ratio of demand and supply. In response to it, The Chinese ports have majorly observed the decrease in port calls leaving the international shipping industry in a plagued situation.
As per the statistics released by Alphaliner, 30% to 60% outbound shipping capacity withdrawn in Asia-Europe marine routines have severely disrupted trade activities.
Stringent Measures Impacting Trade Traffic
China is the major player in international trade as it is home to the buosiest and important shipping container ports in the world. The Shanghai and Yangtze ports have seen the serious impact of the Corona virus disrupting the massive trade activities on a large scale due to the stringent measures taken by the government.
The entry and exit of the ships have also been restricted in various important ports as a quarantine measure to limit the outbreak impact. Some of the largest trade and logistics shipping operators have already stopped their freight services in Chinese regions.
The U.S has also put a strict limitation on the entry of vessels operating from the Chinese waterway as they have also announced the active surveillance of such crews and ships for a specific time period.
The crew members will only be allowed if they are not found sick after the 14 day period subject to certain guidelines by marine coastguards. This strict quarantine is also causing a major setback for trade activities keeping operations in a temporary halt.
Cargo Backlogs- A Major Issue for Shipping Industry in China
Since most of the international cargo ships halted in quarantine, there are possibilities that cargo backlogs will cause problems to freight operators. In some of the cases, the containers are being sent back to origin due to the port congestion while some countries are avoiding Chinese shipments.
It is also been seen that logistics have become a major issue in order to tackle the scenario. It is expected to return back to normalcy once the guidelines shall be revised by the authorities.
Decreased Demand & Supply for Freight Operators
The demand and supply from industries is currently at stake as most of the production is halted in the Chinese ecosystem. As the Chinese manufacturing industry accounts for the majority in worldwide exports, the drastic drop in demand & supply is observed in the shipping industry. This has also hampered freight operations resulting in the withdrawal of services in some of the regions.
IMO 2020: Maritime Regulations amidst the Major Outbreak
The Shipping industry has faced the worst scenario due to the major outbreak as it is also going through a transition to opt for low sulfur fuels which are costlier than the fuel which is previously being used.
While a large number of ships are already going through retrofitting of Scrubbers, this process might get hampered due to the workforce slowdown. The cost of regulatory compliance can be seen as a burden to most of the freight operators as the revenue has declined as a result of hampered operations.
Predictions: Future of the Shipping Industry
The current scenario revolving around the coronavirus has resulted in a setback for the maritime and shipping industry. In terms of tracking progress ahead, it is quite dicey to predict the future of the shipping industry in the meantime.
As per the experts, the industry might soon return to normalcy as the virus severity gets decreased due to the change in weather in March-April fostering industries to operate back in full swing. However, it might take some time more to resume the freight operation in its original state.
The quarantine levels are expected to be revised once the situations recover in a consistent state. While the decrease in expected volumes of containers to be shipped will remain a major problem for the global supply chain.
