Coronavirus disease which is a serious worldwide issue causing an major impact on the worldwide economy. Covid’19 has disrupt all the trades within the world effecting the international trade and shipping industry which plays a key role in the transportation of essential supplies, foods and other necessitates, a role which even becomes more valuable during the ongoing pandemic.
As 2020 had a rough beginning, keeping in mind that the first COVID-19 case emerged in late December 2019, with the report stating that during the first six months of 2020, a total 1,675 sailings have been cancelled, or 11%; which comes out at 13% for 2M, 17% for Ocean Alliance and 17% for THE Alliance, while only 8% of non-alliance sailings have been cancelled. The shipping industry has experienced major disruptions in Q1 of 2020 due to both the Coronavirus and the crude oil price crash. As major parts of the global economy shut down, so have pockets of international trade, yet, not all vessel types have experienced the same disruption.
The logistics chains are also going through unusual and massive losses from the disruption caused by the COVID-19 pandemic. The disruption is both from supply and demand side. Terminals, CFSs, ICDs and warehouses are feeling the heat. The shutdown of factories and scarcity of manpower to de-stuff cargo as well as drivers to operate trucks for cargo evacuation has derailed the trade and smooth functioning of the logistics industry. The estimate is a cumulative loss of $9 trillion to the global GDP and the world trade has already witnessed a decline by 32 per cent. India’s exports plunged by 35 per cent and imports by 29 per cent. The ports witnessed a 50-60 per cent fall in traffic, operating at 30-40 per cent capacity. There is a 5.25 per cent decline in cargo volume in March vs March of 2019. In case of containers the downfall is about 12.51 per cent. The turnaround time at ports is around 12.2 days, which was about 3 days in pre-COVID-19 scenario. An estimated 1.5 million truck drivers have gone to their native places and there are a lot of restrictions on inter-state and intra-state movement. This also caused a spike in freight rates ranging from 15 per cent to nearly 80 per cent. A similar situation we are witnessing at neighboring ports of Sri Lanka and Bangladesh with huge container pileup happening. Currently it is estimated that 80,000 containers are stuck at CFS in and around JNPT and about 50,000 containers at Chennai Port and we are hearing similar situations at other private terminals.
In a recent report from vessel tracker it shows that the that cruise ship activity has collapsed in the wake of reduced tourism due to the coronavirus pandemic, with global port calls falling from 900 port calls per week in January to fewer than 100 port calls per week in April, with an overall drop of 35% in total year to date activity compared to 2019. Other vessel types have fared better than the cruise ship activity but remain at lower levels of activity compared to 2019. We see declines for vehicles roll-on/roll-off -15%, containers and crude oil -3% and bulk -1% vessel traffic.”