Unsurprisingly, the rapid spread of COVID-19 has had a major impact on global shipping markets. As the first country to have the infection, there was an initial halt in demand for goods from China. That, combined with various international lockdown measures has had a complete domino effect on everything from container ships to oil tankers.
According to data from UNCTAD, shipping carries more than 80% of the global trade, and container ships constitute about 13.4% of all international shipping.
In January and February of this year, there was a serious decline in containerships visiting Chinese ports. The container sector is one that significantly relies on China and due to COVID-19, there was a massive pause on economic activity around the world. This really threw a wrench into the standard supply and demand system. It quickly became apparent that we’ve all become so dependent on not only the Chinese exports but also the Chinese demand. When they suddenly weren’t accessible, it really made quite the difference.
In the first quarter of 2020, the coronavirus pandemic caused a 3% drop in global trade values, according to UNCTAD. As of February 1st, around 310 container ships around the world were inactive. In fact, the organisation published an animated infographic on their social media channels (which is also available to download) comparing weekly port call numbers between this year and last.
Jan Hoffmann is the Chief of the Trade Logistics Branch and Division on Technology and Logistics at UNCTAD. He said, “I have found the moving maps with different sized and colored circles particularly useful. In one progressing image, we can see three things at the same time: A) the overall importance of each country, B) how its port calls are growing or declining, and C) how it compares to last year, pre-COVID. You may want to replay it several times to watch trends in different regions and countries.”
London-based Data Analyst Julian Hoffmann Anton also contributed to the creation of the map. He added, “It is an intriguing challenge to summarize, on a global scale and over time, all the insights provided by MarineTraffic’s latest data. It has been an exceptional opportunity to explore, discover, and display important spatiotemporal patterns while the COVID‑19 crisis is still unfolding. Fleet by fleet, the animated maps contribute to the global efforts to understand the consequences of the pandemic.”
At the end of April, the world’s largest container vessel (also referred to as a mega container) called the HMM Algeciras was launched. It’s the first of 12 sister ships and each of the 24,000 TEU vessels is set to be deployed by September on the Asia-Europe trade route. However, they’re entering the industry at a time where the supply-demand balance has been shaken and the future for such large vessels is very uncertain.
Cargo demand in Europe is likely to remain subdued for quite awhile. So, it’s not the most ideal time to introduce new ships and add more capacity – especially to such a large extent. There’s been an unprecedented number of canceled voyages, extending until July as well as lack of major bookings. This is a clear indication of the low demand expectations for this summer, even as we see health conditions improve.
Containerships generally work on fixed schedules, as opposed to tankers which are on long-term contracts or bulk carriers, which are often on single-voyage contracts.
Blank sailings (voyages that have been canceled by the carrier) will increase and cut capacity from the Asia-Europe route. According to SIMC, the Asia-US, West Coast route might have to blank 25% of the planned voyages while about 20% of sailings will be blanked on the Asia-US, East Coast trade route.
As lockdowns begin to ease and people start turning back to ‘normal life’ it can be assumed that the size of containerships, as well as the amount of load carried, will have to start to change going forward.
Since these are such unprecedented times, there’s no telling exactly what can happen for the rest of 2020 and beyond. Using MarineTraffic allows you to monitor exactly which containerships (or any vessel type) are currently sailing, are anchored, or are sitting in a port. The satellite map provides an overview, and there is also a ton of logistical data that can be gathered as well. For instance, departure/arrival times, vessel specifications, port info, and even high-res photos of each vessel.
The use of technology to predict, plan, and monitor data for voyages or vessel logistics is absolutely crucial. These tools will be how we can map out the next chapter of the shipping industry, one that can flourish post-COVID.
Containers Don’t Lie: Global Trade Forecast
MarineTraffic, in association with Posidonia and Navigate PR, hosted an informative digital session on Thursday, June 23, focusing on containership movements. Jan Hoffmann, along with other experts, shared their insights on what box movements are telling us about global trade.
Missed it? You can watch the webinar here.