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Box shipping could shrink 10pc if virus is as bad as 2008 financial crisis

THE blanking of half of all headhaul sailings since the Chinese New Year to reign in the spread of the coronavirus has led to severe equipment shortages in the US and Europe

18 March 2020 - 19:00

THE blanking of half of all headhaul sailings since the Chinese New Year to reign in the spread of the coronavirus has led to severe equipment shortages in the US and Europe.

Alphaliner said Mediterranean Shipping Company was redeploying the 23,756-TEU MSC Mia to the transpacific leg of the 2M's North Europe-Asia-US west coast service, combined with the AE1/Shogun-TP-6/Pearl loop, and it will be the largest containership to call at the US.



It added that two weeks later the 23,656-TEU MSC Nela would shift from the AE2/Swan Asia-North Europe loop to the transpacific, to perform a similar function, reported LA area's gCaptain.



Alphaliner noted that, by replacing the normal 13,000 TEU-plus ships that habitually operate its transpacific strings, MSC and 2M partner Maersk Line would be able to reposition 6,000 TEU of empty containers to the US to alleviate pent-up booking demand.



In a separate development, China's prolonged factory shutdown dented container traffic in February at the ports of Los Angeles and Long Beach.



At Los Angeles imports dived by 22.5 per cent last month, compared with February 2019, to 270,025 TEU, while exports dropped by 5.7 per cent to 134,468 TEU. Empty container movements fell by 35 per cent to 139,544 TEU.



At neighbouring Long Beach port, imports decreased by 17.9 per cent to 248,592 TEU, although exports were actually ahead by 19.3 per cent to 125,559 TEU, and empty containers were down 12.8 per cent at 164,277 TEU.



However, Port of Long Beach executive director Mario Cordero was optimistic about recovery. 'Once the virus is contained, we may see a surge of cargo, and our terminals, labour and supply chain will be ready to handle it,' he said.



However, notwithstanding hopes of a 'v-shaped' recovery among ports and carriers, one leading liner analyst is warning that the industry is facing a contraction in global container volumes not seen since the financial crash of 2008.



SeaIntelligence Consulting's Lars Jensen warned that with the pandemic rapidly escalating in Europe and the US, the shutdown of non-essential public workplaces, events and leisure activities would see import demand drop sharply.



'Hence the expectation of a surge out of China to make up for the earlier shortfall will be postponed,' said Mr Jensen.



He added that if the virus crisis played out in a similar fashion to the financial crash, when consumers and businesses suddenly reigned-in their spending, it could result in a 10 per cent contraction in container volumes, equalling a shrinking of some 17 million TEU globally for container lines and a loss of 80 million TEU for container ports and terminals.


WORLD SHIPPING

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