Shipping Industry Can Face Up To $1.7 Bln Loss In Revenues Amid COVID-19

The impact of the coronavirus outbreak on the shipping industry “is continuing to increase in scope, and the ripple effects are continuing to show up,” said Sea-Intelligence, an analysis company specialized in the sector, in its weekly report. The observation comes at a time when industries and commerce are starting to slowly get back to work across China.

According to the document accessed by CGTN Digital, in the 10-week-period, comprising of the Chinese New Year and the ongoing coronavirus outbreak, the industry is being faced with a downfall of some 1.7 million TEU (twenty-foot equivalent unit is the inexact unit of a container), roughly 1.7 billion U.S. dollars in revenues for the carriers.

For the Copenhagen-based company, this TEU loss represents one percent of the total global volume in 2019, meaning that the “coronavirus is thus far on track to reduce global container growth in 2020 by one percentage point.”

“The hope is that the situation will be brought under control in the near future and that we will get a V-shaped recovery,” the report said, noting that it is possible for the shipping companies to catch up on some of the 1.7 million TEU.

But even in this case, because many containers were exported out of China and there were so many blank sailings, it “will be a challenge for carriers to repatriate them quickly enough to meet a sudden post-virus surge out of China.”

Andy Lane, an analyst at Sea-Intelligence, told CGTN Digital: “Without a large escalation of new infections, and as people get back to work, there should be noticeable improvements within a few weeks.”

According to ship-technology.com, the number of port calls at Shanghai and Yangshang declined by 17 percent in January, compared to the same period in the previous year.

Danish shipping company Maersk Line is expected to face the biggest impact since China represents 30 percent of its annual shipping volume. Hapag Lloyd can also face a weak first quarter because China operations account for 25 percent of the group’s total revenue.

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