• en

Weathering the storm

How COVID-19 is affecting the marine industry

The global health emergency has changed how the world does business – ports, mariners, and shipping companies included. Here’s a look at how things have unfolded so far, as well as a look at what may lie ahead.

Restricting the movement of people has been an important defensive step for international health officials, helping to slow the spread of COVID-19. The maritime industry, though, is fundamental to the world’s economy, and it depends on seamless travel. According to the International Chamber of Shipping, around 90 percent of international commerce relies on maritime shipping, for food, medicines, fuel, and other critical goods.

The situation has raised a number of difficult questions for seafarers, shipping companies, and governments. How can shipping companies maintain operational readiness and safety at sea while reducing risk of outbreaks? How can governments limit the risk of seafarers spreading the virus internationally?

On March 17th, Maersk, the world’s largest container ship company, took the unprecedented step of suspending crew changes until April 14th. The Port of Singapore, which remained open to cargo, also temporarily suspended crew changes around the same time. Other ports around the world took similar measures. Due to the disruption in global air travel, many crew members have been trapped at home unable to assume duties or stuck at sea for longer than planned. The IMO recently endorsed new protocols aimed at safely easing restrictions on mariners. Hopefully, such protocols will help bolster the operational readiness of the world’s trade fleets while minimizing risk to the public and seafarers.

Unfortunately, mariners having difficulty changing crews is only part of the problem for the global shipping industry. Factory closures, first in China and then around the world, have contributed to a slowdown in container traffic, even as e-commerce sales are up.  An April survey of some 300 shipping and freight professionals revealed that more than 97 percent of respondents had been negatively affected by trade disruptions so far. Volume declines, transit delays, and lack of capacity are widespread. With lockdowns easing, and mariners moving from home to assignment more swiftly, perhaps this will soon change.

Every port is different

The situation has had a knock on effect for ports around the world. The International Association of Ports and Harbors provides comprehensive information and up to date guidance as they’re published by ports around the world.

Blank sailings are a big part of the slowdown equation. Statistics for many ports are sobering. The Port of Los Angeles, the USA’s busiest container port, had 41 blank sailings in the first three months of 2020. Its sister port, in Long Beach, saw a further 19 canceled vessels.

Room for optimism?

Not all news is bad news, however. Port of Valencia exports to the US, for example, were higher this year than over the same period in 2019. Sweden’s Port of Gothenburg had no first quarter slowdown at all, although that is expected to change in the second quarter, reflecting larger, global conditions. (Interestingly, Sweden is one country that has not imposed social distancing guidelines.)

The April survey, discussed above, shows that most respondents (95 percent) expect their business to recover, although 44 percent foresee “a slow recovery.” Watch for IT and engineering changes to assume higher profiles. Forward-thinking companies might see an opportunity to transform their operations and services digitally, which will set them on a more competitive course when trade does open back up.

Long-term changes?

Dr. Martin Stopford, President of Clarkson Research in the UK, has considered the situation’s impact on shipping from a wider lens, including how the crisis will affect the IMO’s 2050 carbon target of 70 percent reduction from 2008 levels.

Stopford’s analysis does not sugar coat the challenges facing the marine industry, but it does include room for optimism. Stopford argues that the pandemic might just shake up the maritime industry enough to catalyze new, game-changing investments. Those investments would help resolve critical issues—in fuel use, the industry’s response to climate change, and the digital revolution—making the industry stronger and more sustainable on a whole. Stopford likens this opportunity to the last huge maritime shift: from sails to steam.

As the pandemic eases, decisions about substantive next steps need to be taken carefully. Hopefully, these optimistic signs will emerge sooner, not later. It’s worth remembering that even at the start of the current international crisis, the global shipping industry faced some significant headwinds, from trade policies to environmental issues. Change was already on the horizon, in other words. The current crisis has accelerated the digital transformation in other industries. Perhaps that shift will help the marine industry confront the current crisis and its existing challenges, too.

Related articles

Marine News
2020 cruise industry trends
Why sustainability is set to play a major role
In Focus
17 goals for a brighter future
How shipping supports UN sustainability targets

Leave a Reply

Your email address will not be published. Required fields are marked *

*