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Coronavirus Effects on Shipping

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Coronavirus Effects on Shipping

Coronavirus has wreaked havoc all over the world. What started as a virus spread in China has now been declared as a pandemic, with daily reports of fresh cases around the globe.

As a result of this pandemic, entire business communities have come to a standstill as we struggle with facing a collapse of the economy. One of the worst hit businesses is that of logistics, as all international market movements are now restricted.                       

Logistics management software has enabled the shipping companies to keep track of fleet movement. However, due to this pandemic, many fear that the oncoming holiday season or back-to-school season may be a total flop for merchants, since there are limited and restricted imports and exports.

EFFECTS OF CORONAVIRUS ON SHIPPING

It is a known fact that most of the products available in global market are of Chinese origin. China plays a prominent role in the supply of electronics, textiles and other goods. However, the Coronavirus pandemic has put an end to its trading capacity, as entry of goods from China is restricted as a precautionary measure to contain the spread of virus that originated in China.

Since then, there has been a substantial decline in the consignments sent globally through air and sea routes. More than airfreight, ships carry a bulk of consignments in containers, as it is a cheaper option for sellers.

Currently, the number of containers in docks has decreased from all ports across the world. This significant decline has hit the trading company’s big time, because it is these festive and school opening seasons that normally see a surge in their sales and profits.

From cars, machinery, clothing to other consumer staples, all goods are shipped in containers. Since there is a lull in trade, the manufacturing activities have also cut down considerably, thus affecting jobs and the economy.

PRECAUTIONS AT PORT

As far as global trade is concerned, 80% of the volume of goods is carried by sea route and China has the distinction of having seven of the ten busiest container ports. Singapore and South Korea are next in line of activity.

However, after the virus outbreak, other countries have shut their ports for vessels travelling from China or that have passed through Chinese ports. This has resulted in many containers and vessels lying idle in docks.

Many companies have shut down production due to unavailability of raw materials. This has greatly affected employment as many workers are being laid off due to closure of activities. Meaning there are now very few truck drivers and laborers to load / unload the containers. With many of the vessels in floating quarantine as numerous countries are not willing to admit them in their ports, unless the crew is cleared of the virus infection.

The crew has to submit medical assurance that they are virus-free before they enter the ports. Companies are canceling shore leave for crews, to ensure minimal interactions with locals, while continuing to keep check on the virus spread. Nonetheless, this is causing a great deal of inconvenience to sailors, due to idling in floating quarantine zones, they are fast exhausting their food supply and have no means of replenishing it.

Giant shipping companies like Hapag-Lloyd, Maersk and others have cut down their number of vessels from China and Hong Kong that serve countries like India, West Africa, USA and Canada.

IMPACT ON SHIPPING

It is a very difficult situation for shipping companies to survive under this indefinite restriction on movements. In order to keep their clocks ticking to some extent, many shipping companies have resorted to cut down their freight charges. No doubt, that the Coronavirus outbreak has had a negative impact on economy and it will be a while till the whole system comes back on track.

Since the container vessels are lying idle at the ports or mid-sea, there is shortage of supply for production and thus manufacturing industries are also facing losses. Logistics management software that helps to keep track of all fleet activities, right from consignment loading to on-route tracking, has seen considerable decline in shipping business. More ships are docked at the port than sailing. There is no noticeable movement, as the trade supplies have been cut and services suspended.

Shipping industry is in demand for its cost effectiveness and the sheer bulk that it can carry at one time. However, with decline in containers for delivery, there is not much that the companies can do to overcome this crisis of pandemic. The uncertainty is causing anxiety in the trade industry, as no one knows the period when things will return to normalcy.  

ROLE OF LOGISTICS MANAGEMENT SOFTWARE

Under the current circumstances, it is essential to keep record of the shipping activities that are hit by this Coronavirus outbreak. Before the pandemic, many vessels had set sailing with the cargo, for delivery to various destinations. Unfortunately, the major chunk of supply came from China and has been restricted / banned as precaution. Nevertheless, it is important to track the consignments on route, to ascertain the safety of the cargo. Since the ships are docked at ports or are in floating quarantine zones, the software tracks the location of the vessel and its estimated time of further journey after the 14 days lay off.

It is easier to know the entire details of a particular vessel and its consignment through such software. It has records of the pick-up spots, destination spots, contents of the cargo and the designated route that the vessel is likely to follow before reaching final destination. The ships offload their cargo at different destinations before final destination. Thus, the software helps to keep records of consignment offloaded at these mid-ports.

Conclusion

The Coronavirus pandemic has affected the world economy and besides air transport, the shipping industry has taken a major hit.

Since China is the main supplier of goods to the rest of the world and there has been ban of its trading activities for safety reasons, the entire trade industry has collapsed.

Major volumes of goods are traded via sea transport. Now that the Chinese vessels are not allowed entry in other countries, the entire system of supply chain has come to a standstill. It will be a while until things get back to normal and the virus spread comes under control. Until then, the shipping industry and manufacturing / trade industry are going to continue to suffer financial loss.

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