The COVID-19 (coronavirus pandemic) has an adverse effect on the world’s Economy and Trade. According to the reports, global economic growth is expected to see a contraction of over 3 percent in 2020. All the major world economies suffered a major drop in their GDPs. The aviation, automobile, construction, tourism, hotel, and food industry, etc. are likely to be hardest hit by the COVID-19 pandemic.
Meanwhile, the rapid spread of the virus has had a major impact on the shipping industry as well, with slums in the chain of supply and demands causing unrest and having a ripple effect on everything from containers to oil tankers. China, the powerhouse of the shipping industry, is the first one to detect the virus. But the virus outbreak has now tightened its grip on the entire world; with Europe, it’s the epicenter. Although throughout the pandemic situation, shipping continues to operate, but it’s like navigating in uncharted waters.
It wasn’t Until February that the global shipping sector started to really feel the covid-19 pandemic impact. Exports from mainland China have dropped significantly in February 2020. The coronavirus has a horrendous effect on the shipping industry because of its relationship with China. China really is the driver of the shipping industry. Demands for raw material and exports of finished products, we are so dependent on Chinese products. Also, the Container sector, which significantly relies on china, fell victim to the coronavirus outbreak.
The container ships are experiencing reduced charter rates and utilization of its fleet. During the urgency of the situation, the ban has been imposed by many countries on the entry of containers that are being operated from other countries, especially those that are transported from China. The workforce (manpower) has been shut down for the safety and prevention of the escalation of COVID-19. Many crew and workers are being trapped on board during this adverse time, either being in quarantine or other prescribed safety issues. The ports have been closed in effect, in order to ensure the well being of the workers. The entry of vessels by a certain country is being restricted or prohibited.
Many smaller companies engaged in shipping have gone bankrupt due to the inability to handle the finances of the company during this period of less demand and supply of cargo. The demand for cargo and cargo handling capacities is reduced to a much greater extend. Perishable goods are it being able to be transported due to the waiting period of 14 days(decided by the country). Various kinds of disputes are arising between the owner and the characters due to loss in time and money. Addiction of clauses on different companies’ health insurance policies, as different guidelines to be set due to infectious disease.
All drydocks, ship repairs, and maintenance work are to be prevented or carried out under the quarantine guidelines, due to which they suffered financial losses. One of the major problems faced by the Shipping industry is the inability of crew change onboard. Many people remain stuck for over a year, long after the completion of the contract, putting them at the risk of mental depression and injury.
This was primarily because the aviation sector was on a complete standstill for months. Eventually, shipowners arranged the chartered flight for a crew change, which was another financial blow to the owners. To conclude, we can say that not only the shipping industry but the ship owners, port authorities, and seafarers all had suffered in this pandemic situation.