By Adedapo Adesanya
Global shipping activities may lose $1.7 billion in revenue following the impact of coronavirus outbreak on the international shipping sector.
This was disclosed by a Copenhagen-based analysis company, Sea-Intelligence, in its weekly report which studied a 10-week-period, comprising of the Chinese New Year and the ongoing coronavirus outbreak.
Since the Chinese New Year is the biggest holiday in China’s calendar, shipping and logistics companies already expected a higher number of blank sailings (cancellations by the carrier), but those estimates were elevated due to the epidemic.
According to Sea-Intelligence, the industry is faced with a downfall of some 1.7 million TEU (twenty-foot equivalent unit is the inexact unit of a container), roughly 1.7 billion U.S. dollars in revenues for the carriers.
According to the agency, the TEU loss represents one percent of the total global volume in 2019, meaning that the coronavirus is far on track to reduce global container growth in 2020 by one percentage point.
The agency also suggested that Maersk Line could face the worst revenue downfall from COVID-19 since China represents 30 percent of its annual shipping volume in the world.
The firm noted that the impact of the coronavirus outbreak on the shipping industry had continued to increase in scope, with accompanying ripple effects.
According to the report, “the largest capacity reduction was registered in Asia to North Europe lane, where 11 percent of the capacity was blanked since the Chinese New Year.
“When considering the holiday’s blanks, 29.5 percent of the capacity was removed from the trade, in over 10 weeks.
“In the Transpacific trade to the North American West Coast, 10 percent of the sailings were blanked due to the virus, bringing the total level of blanked capacity to 24.1 percent.”
In the 10-week-period, during which the coronavirus has affected every sector in the industrial chain, the Transpacific trade to the West Coast now equals 74 percent of the normal Chinese New Year removal while in the Asia-Mediterranean lane, the impact is 71 percent, the report noted.
However, to avoid factory shutdowns due to lack of components, the agency said that some auto plants have chosen to use air cargo trips as ports are faced with congestion.
