It can no longer be ruled out that the container shipping industry might be looking at developments similar to the financial crisis of 2008, SeaIntelligence said, referring to the impact of the coronavirus pandemic.
“This implies a potential volume loss of 10% equal to 17 million TEU globally,” the Copenhagen-based provider of container shipping analysis warned.
“For the ports and terminals, they will be potentially looking at a loss of some 80 million TEU of handling volume in 2020,” Lars Jensen, CEO of SeaIntelligence pointed out.
As explained, the real underlying problem is the impact the pandemic will have in the longer term in 2020 and possibly beyond, not only on consumer spending but also on the willingness of companies to order goods in the first place – as well as their ability to do so, as a possible financial liquidity problem is beginning to appear. There is also a realistic risk of bankruptcies.
On the positive side, there are two elements helping the carriers. One is the collapse of the oil price which acts as a short-term cash infusion to carriers having bunker surcharges based on oil prices two months ago and paying bargain basement prices for oil today. The other is the discipline the carriers have shown in blanking sailings and avoided dumping freight rates to fill vessels.
“This means that until now rates have been relatively stable despite the coronavirus impact from China and might well also be through the coming period if we see a new raft of blank sailings,” according to SeaIntelligence.
“Finally, even if this negative scenario plays out fully, we also need to be prepared for the aftermath which will come in the shape of a sharp rebound where we will temporarily see capacity shortages and rocketing freight rates.”
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