The year 2020 will go down as one of the most challenging the shipping industry has had to face. The coronavirus pandemic has had a major impact on the global shipping industry, causing turmoil at almost every point in the supply chain. Unfortunately, experts believe these issues won’t resolve until a vaccine is widely available.
The COVID-19 pandemic has disrupted supply lines, created an unprecedented global financial crisis, closed ports, and changed how international shipping looks forever.
At some ports, ships arrive overflowing with goods only to sit untouched for months. Since there’s no one there to unload the goods, factory production ceases due to a lack of parts and goods.
Here are some other ways in which the coronavirus outbreak has affected the shipping markets.
Antivirus Measures on China
In early December 2019, all eyes were on Chinese ports. The virus, originating in China, hampered the shipping sector as everyone fearfully observed the country of the virus’ origin.
As COVID-19 spread across the globe, the entire international trade industry ground almost to a halt. In the short term, shipping companies were prohibited from entering China or any of its large ports. Cargo ships were turned away and had to make alternate plans to dock in other countries.
The Yangtze and Shanghai ports in China are some of the largest and most important in the world, able to accommodate some of the most massive shipping vessels, bringing in and sending out goods from all over the world.
However, China is one of the first countries whose supply chain is beginning to recover as air freight leaped a whopping 27% after the pandemic started to wane in Wuhan and nearby areas. Chinese manufacturing is now back on track, more so than other countries like the United States or Hong Kong.
Because of the dangerous contagion levels of COVID, shipping authorities have closed many ports for the medium term. To protect workers on the ships and at the docks, medical officials have shut down operations, creating major issues for the shipping industry.
One-seventh of the world’s port workers hold Chinese passports, which means many ports and shipping lines are having a hard time replacing crews on their colossal shipping boats.
There is a large backlog of cargo since many ports have closed due to the pandemic. Some shipments have been sent back to where they came from, and others have been caught in the limbo created by the virus’ spread.
Decreased Demand for Cargo
The manufacturing industry in China is the largest in the world. With fears of contagion, people aren’t willing to risk importing and exporting goods internationally. In some regions, the drastic drop in demand has resulted in the withdrawal of certain services, like delivery, assembly, and storage.
Additionally, China has drastically reduced its demand for certain dry bulk goods since the beginning of the outbreak, and the effects of this decrease ripples around the globe. A dropoff in dry bulk, including iron ore, crude oil, and other vital resources, caused the daily rates for charters to plummet as well.
Scheduling on-time deliveries has also been disastrous since the pandemic hit. Without reliable transportation for goods, there’s no telling when cargo will arrive in port, or even which port.
Smaller Companies File for Bankruptcy
Smaller companies have fared less well than their larger shipping counterparts. If a shipping company isn’t large and well-established, they may be considering filing for bankruptcy due to the COVID-19’s widespread financial disruptions.
Without a stable financial base to use while awaiting quarantines to lift and regulations to relax, smaller companies have to do everything they can to stay afloat, and sometimes that’s not even enough, and they file for bankruptcy.
Effects on Air Freight
Air freight looks very different from the shipping industry as a result of the coronavirus. Since so many flights have been canceled, freight forwarders and shipping companies have had difficulty finding any space for their cargo on flights.
Supply and demand do not match the air supply lines capacity. People need space on air freight, but there is such a backlog that many trips are canceled, resulting in extreme delays.
The Future of the Shipping Industry
In the age of coronavirus, everything is uncertain. The only way to truly predict the shipping industry’s fate is to wait until experts understand what will happen with the COVID-19 pandemic.
Once a vaccine is created, (and this goal is getting closer daily), leaders in the shipping industry can assess the pandemic’s actual toll. What is obvious even to the most casual observer is that some things have changed forever.
New regulations and parameters will be permanently put in place to safeguard workers and the industry at large from a future outbreak of an unknown virus.
The pandemic has also led to increased industry interest in advanced technologies such as AI, more efficient shipbuilding, and augmented reality. There’s hope that the threat looming over the world encourages the quick adoption of these new technologies. These novel ideas may help humans, and the shipping industry, deal with pandemics better in the future.
New Technologies for the Shipping Industry
One technology that was well on its way to becoming commonplace and can help protect those who work in the shipping industry is AI. Using robotics hinders contagion because automation like hull-cleaning robots and ship-inspection robots lessens one-on-one contact, reducing the spread of airborne illnesses like Coronavirus.
Like most industries, the shipping industry was hard-hit in the past year. With quarantines, restrictions, and growing public health concerns due to the rapid spread of the Coronavirus, shipping lanes ground to a halt.
It doesn’t seem like much will change until medical experts can create and distribute an effective vaccine. Until then, the shipping industry must adapt to new regulations, safeguard the port and ship workers, and implement helpful technology to reduce person-to-person contact.
Asiana USA can help get your goods to where they need to go. For all your shipping needs, even amid a pandemic, you can count on us. Call us today at (855) 500-1808 or explore our website for more information.