Coronavirus: Shipping Sector may Lose $1.7bn revenue
Against rising concerns of a likely impact of COVID-19 disease popularly known as Coronavirus on the global economy, the shipping sector may be at the risk of losing an estimated $1.7 billion revenue if the disease is not stemmed.
The most affected could be the international shipping lines as findings revealed that Maersk Line could face the worst revenue shortfall with China representing 30 per cent of its annual shipping volume.
However, the Sea-Intelligence, an analysis company based in Copenhagen Sweden, said the impact of the coronavirus outbreak on the shipping industry is continuing to increase in scope, and the ripple effects are continuing to show up.
Sea-Intelligence, in its weekly report, stated that, “In the 10-week-period, comprising of the Chinese New Year and the ongoing coronavirus outbreak, the shipping industry is being faced with a shortfall of some 1.7 million TEU (twenty-foot equivalent unit in the inexact unit of a container), roughly $1.7 billion in revenues for the carriers.” For the Copenhagen-based company, this TEU loss represents one per cent of the total global volume in 2019, meaning that the “coronavirus is thus far on track to reduce global container growth in 2020 by one percentage point.”
“The hope is that the situation will be brought under control in the near future and that we will get a V-shaped recovery,” the report said, noting that it is possible for the shipping companies to catch up on some of the 1.7 million TEU.
But even in this case, because many containers were exported out of China and there were so many blank sailings, it “will be a challenge for carriers to repatriate them quickly enough to meet a sudden post-virus surge out of China.”
According to ship-technology.com, the number of port calls at Shanghai and Yangshang declined by 17 per cent in January, compared to the same period in the previous year. Danish shipping company Maersk Line is expected to face the biggest impact since China represents 30 per cent of its annual shipping volume. Hapag Lloyd can also face a weak first quarter because China operations account for 25 per cent of the group’s total revenue. The Sun