When the pandemic hit, every business across the world has been significantly affected at a level we’ve never seen before and the shipping industry is no exception to it. Every aspect of our sector, from unsustainable airfreight pricing and cargo backlogs to blank sailings and huge drops in demand. We’ll discuss more about these effects below.
Decreasing Demand in Global Markets
The decreasing demand has tied up global freight operations as the periods of lockdowns largely impacted demand and supply from almost every industry in import and export.
The impact of COVID-19 was initially felt in China, transactions from both domestic and international in Chinese markets fell each week by around 56 percent. Given that China is the world’s largest economy, the shockwaves widely spread. The UK, the U.S., Europe, and other marketplaces across the world soon felt the impact.
Port Restrictions and Blank Sailings
When the first COVID-19 shock wave hit, two of the busiest and most important transportation hubs in the world, the Shanghai and Yangtze ports are subject to significant restrictions causing many difficulties for imports and exports from those areas around Chinese ports. As the pandemic hit globally, the Maritime Safety Queensland in Australia decided that vessels would be restricted from docking for a period of 14 days since they came from a foreign port. Delayed cargoes and backlogs at the Port of Brisbane would have been unsustainable for the industry.
The COVID-19 has also led to a surge in blank sailings. Many major shipping lines have all announced the cancellation of their voyages since the pandemic hit in March. If not prepared to deal with blank sailings, it’s clear that shippers across the world will continue to face the possibility of disruptions.
Cargo Backlogs
With cancelled flights across the globe, cargo backlogs at airports have been of significant note during COVID19 pandemic.
Backlogs at some ports have also occurred in sea freight even when compared to air freight has not suffered in similar level. In California, Fortune reported a huge drop that happened in April sales caused a “chain reaction backlog” which increased backlogs and others just waiting for days to let off cargo.
Conclusion – a disrupted shipping industry
These times of international health crisis have shown us how critical the global movement of cargo is and the flaws of the present network of global supply chains.
There are a lot of cost-effective solutions that businesses and organizations can implement both in air and marine supply chains in response to COVID-19. One good example is the recent work of United Nations Children’s Fund. UNICEF’s routine delivery of vaccines to children in low-income nations was almost halved due to severe disruptions in global shipping operations.
Companies should look for ways they can diversify and structure their supply chains. We should also never underestimate the power of digitalizing the shipping and container so that the industry can be better prepared for inevitable events such as the COVID-19.
