The Coronavirus (COVID-19) is costing the shipping industry $350 million a week in lost volumes as travel restrictions impact factories, shipyards, and maritime operations.
Maritime data provider Sea-Intelligence reports that 350,000 boxes have been removed from global trade, which is causing a “massive shortfall in demand”. This has led to major blanking (canceled sailing) of carrier services. Sea-Intelligence expressed grave concerns that the last few weeks have seen some 31 services across Transpacific and Asia-Europe canceled, which is on top of the seasonal low due to Chinese New Year.
The WSJ reports that Shanghai and Hong Kong Port officials say only about half of dock workers were back to work this past Monday. These ports are among the world’s busiest container ports.
Other industry reports indicate that:
- All Asian exporters will be impacted
- Companies who ship to Asia should brace for upcoming capacity issues up to six weeks out
- Price spikes are likely, with backhaul rates likely to exceed headhaul rates
- The virus is impacting retrofit yards in China causing further shipyard delays
Industry analysts are expressing uncertainty on how long the impacts will take their toll. Logistics Management’s Jeff Berman last week indicated that events such as this prove how imperative it is for businesses who ship to invest in the tools to gain greater visibility into their supply chains. He says this enables them to mitigate the harm to their business that such events can have.
In our latest shipping guide, we offer tips on how to digitize supply chains to gain greater visibility. Digitizing supply chains is about connecting the data points across the entire supply chain. This includes connecting carrier websites, customer management systems, warehouse systems, and ordering and tracking systems, via a shipping management software solution.
You can download our guide for free below to learn more.