EDITOR’S OPINION

On the way to recovery?

Shipping, which carries about 90% of world trade, is the life blood of the global economy. Without shipping, intercontinental trade, the bulk transport of raw materials, and the import/export of affordable food and manufactured goods would simply not be possible.

Though Covid 19 has affected the industry adversely, the two million seafarers who serve on the world’s merchant fleet have, by their professionalism and sacrifice, have set a commendable example by continuing to transport more than 80% of world trade, including vital medical supplies, food and other basic goods that are critical for the COVID-19 response and recovery. To achieve this, hundreds of thousands of seafarers face a humanitarian crisis as they have been stranded at sea, unable to get off the ships they operate with contracts extended by many months. To some extent, their signing-on, signing-off problem has been solved by the Indian government and other authorities by enabling the flights of chartered planes to transport these seafarers to their families and homes.

The shipping industry, as a whole, has been adversely affected by the pandemic. However it is making valiant efforts to over-ride the crisis. A transition towards sustainable future has already started with the support of the IMO regulatory framework.

Container shipping is closely correlated with developments in the world economy, manufacturing, and consumption. Consequently, containership port call patterns could generate useful insights into the underlying macroeconomic trends.

According to UNCTAD, the number of ships pulling into ports to unload and load containers rebounded in many parts of the world in the third quarter of 2020. This offers a hopeful sign for world merchandise trade, which suffered a historic year-on-year fall of 27% in the second quarter.

Most regions have seen some recovery starting in the third quarter of 2020, both in absolute numbers and compared to 2019 levels. However, at the global level, port calls were still 3.0 per cent below their 2019 levels in early August. North America and Europe were 16.3 and 13.2 per cent below 2019 port calls, respectively. South East Asia had almost reached its previous year’s levels (minus 0.5 per cent), while port calls in China and Hong Kong (China) already surpassed their 2019 values at plus 4.1 per cent. The regional and country trends appear to follow the progress of the pandemic, with recoveries earlier in some regions than in others.

While about 60 per cent of seaborne trade by value is estimated to be carried in containers, other markets are important too, and have been affected differently by the pandemic. LNG, LPG and wet bulk carriers have recorded increases in port calls during the first quarter. In the second quarter, however, all vessel types saw a decline in port calls. The hardest hit were the RO/RO ships, which include ferries and other vessels that also carry passengers.

In addition to data on port calls, it is interesting to look at container shipping timetables, i.e. the planned deployment of cargo carrying capacity, measured in Twenty-foot Equivalent Units (TEU). Fleet deployment informs about shipping lines’ expectations for near future demand. The schedules reflect carriers’ offer to provide regular services based on what they expect in terms of shippers’ demand. Scheduled container ship capacity increased in the first quarter of 2020 as compared to the same period in 2019, for both China and the United States.

Information collected by UNCTAD shows that despite the numerous challenges, the global maritime transport industry has overall been able to weather the storm caused by the COVID-19 crisis.

The success of the industry to override the crisis would depend on the united efforts of the industry.
It is a tough battle but not an insurmountable one!

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