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Home » Global Container Shipments Set to Fall 30% in Next Few Months

Global Container Shipments Set to Fall 30% in Next Few Months

Global Container Shipments
April 23, 2020
Bloomberg

Warehouses are getting so full of goods like fridges and washing machines that retailers are asking shipping companies to push back deliveries, which may drag global container shipments down as much as 30% in the next few months, according to the head of an industry group.

Shipments have probably fallen about 15% so far this year amid the coronavirus pandemic, according to International Chamber of Shipping Chairman Esben Poulsson. Second-quarter declines, compared with a year ago, will depend on by how much governments reopen economies, he said.

“Inventories of goods like apparel, textiles, white goods, are full,” Poulsson said by phone last week. “We are hearing of receivers of these goods asking shipping lines whether they can store these goods for a period of time or slow their ships down or basically delay taking delivery.”

The slump is a setback for shipping giants such as Cosco Shipping Holdings Co. and Ocean Network Express Holdings Ltd., which started the year strong as healthy trade volumes allowed the industry to boost rates. That optimism has now evaporated as the virus outbreak has forced shoppers to stay home, crimping retail sales in the biggest consumer markets.

Forward bookings for shipments from Asia to North America and Europe have slowed for April and into May, according to Ocean Network Express Chief Executive Officer Jeremy Nixon. Shipments of products from North and Latin America, Europe and Oceania to Asia are still strong, said Nixon, whose company is Japan’s largest container-shipping operator.

In addition to lower volumes, the industry has been hit by restrictions aimed at containing the outbreak. Ensuring that seafarers can board and transfer onto ships amid port curbs and canceled flights remains a major challenge, Poulsson said.

Inbound containers to the Port of Los Angeles plunged 26% in March from a year earlier, while Singapore’s container throughput dropped to its worst reading since August and Hong Kong’s measure fell below average again after a brief respite in February.

“Some containerships have been running at only 20% capacity and numerous sailings have been canceled,” Tim Huxley, chairman of Mandarin Shipping Ltd., said in an interview. “Our five container ships have certainly been carrying less and we have also had to endure some waiting time between employment.”

Financial pain from major economies shutting down is rippling across the supply chain, said Lee Klaskow, a senior analyst for logistics at Bloomberg Intelligence. “The dry bulk, ro-ro and containerliner industries will be the most impacted as the service industries halt to a stop and manufacturing capacity lays idle.”

To react to lower exports out of Asia, ONE has reduced regular sailings from the region to Northern Europe, the Mediterranean and North America, Nixon said. A major question for the industry now is when demand might rebound, and whether global trade will be permanently altered by the pandemic.

“In the long term, we still see strong business requirement for global trade and container shipping,” Nixon said. “But the challenge will be what is the growth after coronavirus.”

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