HOW IS THE SHIPPING INDUSTRY DOING DURING CORONAVIRUS?
Coronavirus has been spreading at a furious speed from Asia, Europe to the US, and has decided to spare nobody. Due to the entire COVID-19 pandemic, millions of people have died, and many more millions of people hospitalized, still struggling with their lives. Each country, has enforced a strict lockdown to curb the spread of the virus. All credit goes to COVID-19, which has led to a lockdown even at the shipping ports. Due to the crisis, shipping logistic operators have experienced a greater significant of disadvantage than what they faced during the massive economic meltdown in the year 2009.
HOW ARE SHIPPING INDUSTRIES COPING UP?
There is no doubt that many industries today are severely hit due to the entire COVID-19 pandemic. But amongst the various sectors, the shipping industry has been hit the most. The global shipping industry is directly related to world economic growth, which means that a negative impact on the economic growth directly affects the shipping industry, leaving a significant impact on the service trade and merchandise amongst various nations.
Kristalina Georgieva, the managing director of International Monetary Fund (IMF), warns the nations about:
- The entire damage that has been wrought by COVID-19 pandemic might become one of the ‘Gravest Threat.’ Last, such a situation was experienced in the financial year 2009-2010, almost a decade ago.
- The maritime operators are the ones facing a huge existential challenge as COVID-19 has impacted the trades massively. According to the OECD (Organization for Economic Cooperation and Development), the growth globally could sink up to 1.5 percent from 2.9 percent, which was forecasted earlier.
- As per WTO (World Trade Organization), the real-time measurement of the trends in the trade as per the excellent trade barometer has grown to 95.5 from 96.6, which is still below the minimum baseline of 100. It signifies that trade across the globe has been affected massively. There are speculations that readings of the services and good trade will show a further decline as the related shipping services get impacted.
THE HARSH REALITY
For one of the leading logistic giants Hapag-Lloyd, Maersk or online shipping marketplace such as Rateparcel, that helps customers ship their items in Canada or worldwide, has seen a drop in their logistic business over the past months, and have seen a reduced receipt and delivery of the cargo in containers. There is no doubt that there has been a negative impact, but what will be the exact impact of the pandemic in the future on the ports and shipping industry as a whole is still under speculation.
The entire current situation of COVID-19 pandemic has come with unfolded uncertainties about the demand globally for containers. Moreover, very few giant shipping lines such as Maersk & Hapag-Lloyd and Cosco belonging to China have been able to sustain in this storm. Various small companies now forced to cancel sailings as they had other expenses to look forward to, such as ship maintenance, staff salaries, etc. However, the question is, how will the small companies, especially in developing countries like India, sustain themselves.
Now the only option the shipping companies are left with is to make sure to shelve the disinvestment of the various shipping corporations whose performance has not been up to the mark.