The full impact of the Coronavirus is yet to be seen. As reported by Lars Jensen at JOC.com on February 25, 2020 and summarized here, the outbreak of Covad-19 will have a series of incidental challenges facing the container shipping industry on many fronts. It all started with the failure of Chinese factories coming back online after Chinese New Year. This caused a major drop in Chinese exports with caused a drop in overall container demand. This caused carriers to cancel numerous sailings. The blank sailings are estimated at removing a demand of 1.7 million TEU. This will in turn cause, no pun intended, but a boatload of export blank sailings for cargo back to Asia. All the while, the pre-CNY push left empty containers around the globe. These will be hard pressed to get back to China for loading. The reduction of cargo back to Asia will likely push up rates.

If things go well, China will come back on line quickly, and this will cause a surge in demand for China exports once again. Now this new demand will be impacted by the lack of equipment. A short term resolution will be for China to order new containers to manage this push which positions the industry for possible surplus in the long haul. And this, is only taking into consideration of Dry Cargo, with Reefer cargo adding to the challenges.

Additional elements in the supply chain that will need to be contemplated are port congestion, hampered customs/import operations, inland haulage demand, chassis equipment, etc.

All we can hope for at this time is that the coronavirus subsides quickly and that the individual pitfalls noted about will be short lived. Regardless of how the coronavirus or the remainder of 2020 plays out, you can count on South East World Wide, Ltd. to aid and assist you along the way!

If you have any questions on how your lanes may be affected, please feel free to contact your South East World Wide, Ltd. Sales Representative.