CLARKSONS Research director Trevor Crowe says that Covid-19 pandemic is projected to lead to an "unprecedented decline" in world container trade.
Mr Crowe told a webinar on Container Shipping and Ports organised by Ernst & Young (EY) and Maritime London recently that global containership calls were down by about 5 per cent in the year to date at March 31, while those by vessels of 8,000 TEU and over dropped 10 per cent.
This has led Clarksons to forecast "the biggest decline in containership trade on record," which is expected to exceed 10 per cent for full-year 2020, outstripping the fall of 7-8 per cent that followed the 2008 financial crisis, reports Seatrade Maritime News, Colchester, UK.
At the same time, the idle container fleet currently stands at around 11 per cent in capacity terms, while containership charter rates are down by around 30 per cent since the beginning of the year, Mr Crowe added, and were "edging back down to operating cost level at an alarming rate."
He pointed out that the current slump is a "maturing" world container market that grew by an average 9.9 per cent per year in the 1980s, 9.1 per cent in the 1990s, 7.3 per cent in the 2000s, and 4-6 per cent thus far in the 2010s, he continued.
Future growth predictions for container shipping depended on future trends and counter trends, Mr Crowe said, which elsewhere in the webinar were outlined as including the possibility of greater near-shoring, re-shoring and multi-sourcing of supply chains.
Some good news is that container shipping's emissions have already been reduced by 30 per cent since the baseline 2008 level, Mr Crowe concluded, but a big part of this has been through slower steaming and achieving further reductions represents a "critical challenge for the containership industry."
Also speaking at the event was DP World COO for Ports & Terminals, Tiemen Meester, who described recovery from COVID-19 as "a script that hasn't been written", pointing out that all the UAE-based groups efforts so far had been directed towards hygiene, safety and ensuring ports keep working.
Recovery from the impact of the pandemic will not take place in 2020 but will be "a one-, two- and maybe three-year problem," he opined. In the meantime, "companies seem to be looking to how they can sustain themselves" and were adopting a "disciplined capex approach."
The last point was echoed by Jonathan Beard, EY Partner - Infrastructure Advisory, who spoke of capex being "incredibly constrained" for the next two to three years. Port investments in the short term were therefore likely to include piecemeal improvements such as automation of gates, scanners and RTGs rather than any large greenfield projects, the webinar panel felt.
Wim Dillen, international development manager at Port of Antwerp, took a slightly more optimistic view, describing the Covid-19 problem as "already bottoming out", but agreed that its impact would still be "very hard" in May and June. He predicted "a lot of blank sailings and depressed container flows for the rest of the year", adding that Port of Antwerp didn't expect to see a recovery until "the middle or end of next year."