The Impact of COVID — 19 on the Shipping Industry
The impact of the novel Coronavirus, COVID – 19, has had unprecedented impacts across the globe. Global shipping is not immune to the devastating effects that the pandemic is leaving in its wake, across the world ports are closing for extended periods of time, or closing for small periods of time, about 24 hours per closure, to test the facility and employees for the virus.
When ports close, even temporarily, the economic and structural impact can be challenging. Goods marked for export, but with no carrier to move them, will stay behind and create a backlog of goods at its port of origin.
With so many ports closing, even temporarily, and goods not moving from their port-of-origin while previously shipped containers are still arriving, the congestion continues to proliferate. Containers continue to become scarcer as more and more shipments sit in port.
Over the past few months Asian ports have been particularly impacted and blank shipments have risen due to the production drop in China. China is home to seven of the world’s 10 busiest container ports, according to the United Nations Conference on Trade and Development. When world manufacturing and shipping hubs close, global shipping is clearly impacted as intra-Asian and global supply chains are vital to the success of shipping globally.
The congestion in the Asian market has increased demand in the European and North American markets, spiking shipments from those respective ports that are still functioning. With fewer containers available, shipping companies are turning to shipper owned containers to ship their products.
As countries begin to ease COVID — 19 restrictions, the congestion in the ports will begin to dissipate and containers will once again be available for use.