Paige Foster | Dreamstime.com
Mounting concerns over the new coronavirus, which originated in China’s Wuhan province, are affecting the shipping industry. As of Monday, Feb. 10, the number of confirmed cases of the virus have topped 40,000 worldwide, and the death toll is at 910, according to reporting by CNN. The news network says this new version of the coronavirus officially has killed more people than the Severe Acute Respiratory Syndrome (SARS) pandemic of 2003.
According to an article in the Journal of Commerce (JOC), canceled container ship sailings for the week starting Feb. 2 and air cargo capacity restrictions in and out of China mean that cargo owners will have to rush shipments to market once production resumes at facilities that extended their Chinese New Year closures in response to concerns about the coronavirus.
While businesses were expected to start up again Feb. 10, cross-provincial travel restrictions have meant that nonlocal workers have not be able to return to work, the JOC article notes.
Businesses have extended holidays or made work-from-home arrangements as a result, the Financial Times reports.
“Three shippers, one major carrier and one major forwarder told JOC.com Friday [Feb. 7] they see the potential for a major space crunch developing once volumes begin to move again, which could be as late as mid-March,” the JOC reports. “Uncertainty over the containment of the coronavirus and the eventual resumption of volumes potentially being pushed out further has the industry bracing for space shortages in the ocean and in the air.”
While China’s bookings have slowed, bookings out of ports in Southeast Asia and North Asia are gaining strength, according to the JOC article. “But it’s unclear how much of the imports typically moved from China for the spring and back-to-school season can be sourced via the likes of Vietnam and other Southeast Asian production hubs,” the article adds.
An analyst from SeaIntelligence Consulting, Denmark, tells the JOC that 21 sailings are now being canceled on the transpacific route because of the extended factory closures. This has taken 198,500 20-foot equivalent units (TEUs) out of service in addition to the cancellation of 61 sailings because of the Chinese New Year holiday. “On the Asia–Europe trade, carriers have announced 10 sailings to be blanked because of the coronavirus, removing 151,500 TEU from the market and bringing the total number of blank sailings across North Europe and the Mediterranean to 54,” the article notes.
The article quotes a weekly newsletter from SeaIntelligence that reads: “In very round numbers, we are experiencing a shortfall of some 300,000 to 350,000 TEU per week in the market.”