Coronavirus outbreak causes havoc on South Korea's shipping sector
CONTAINER shipping volumes between China and South Korea have plummeted owing to the coronavirus outbreak that has prolonged the Lunar New Year factory shut down in China, causing disruptions to supply chains with sailings cancelled, according to Chung Yang Shipping commercial director H G Jung
CONTAINER shipping volumes between China and South Korea have plummeted owing to the coronavirus outbreak that has prolonged the Lunar New Year factory shut down in China, causing disruptions to supply chains with sailings cancelled, according to Chung Yang Shipping commercial director H G Jung.
'In terms of container logistics flow, Incheon port has been the most directly affected,' he told London's The Loadstar. 'Import containers entering China from Incheon dropped by nearly 60 per cent.'
Incheon handles three million TEU per annum, but Korea's main port, Busan, handles 21 million TEU.
Mr Jung said import and export cargo at Busan has fallen ten per cent since the crisis started to unfold, but transshipment cargo had 'flocked' to the hub.
'Busan port normally has a 60-70 per cent container stack ratio, but it's reached more than 80 per cent due to the coronavirus. They have secured an alternative storage field in case the situation worsens,' Mr Jung noted.
He claimed the crisis had created the 'worst ever' slack season for the shipping industry.
'Four weeks after the Chinese New Year, the whole shipping industry in Korea is heading toward disaster.'
The shutdown in China has also had a huge impact on Korea's automotive manufacturers, which have struggled to keep just-in-time supply chains flowing.
'This led Korean OEMs to reduce production in February and is highly likely to affect production in March as well,' said one Korean ro-ro carrier executive.
'This, of course, affects shipping companies like us. In February alone, the volume is expected to drop approximately 35 per cent from the initial production forecast,' she added.
There were already some automotive plant closures in Korea linked to the supply chain disruption, and reports claim a Hyundai plant in Ulsan, close to the outbreak epicentre in Daegu, has halted production due to a worker testing positive for the virus.