The Impact of Covid-19 on Shipping – What We Are Seeing
Let’s all admit it, nobody saw this coming. Just 4 months ago, we all sat around our festive tables, paying homage to the year, some hoping for a better 2020. Flash forward to April, and it is proving to be one of the most historically tragic and difficult years globally of the past half-century. The Covid-19 pandemic has had a massive impact on many industries around the world, not least the global shipping industry. The initial lack of shipments out of China, coupled with a slump in demand of goods from China, combined with closing of borders in many countries, has had a ripple effect on shipping markets. We take a closer look at the impact of Covid-19 on the shipping industry.
With everyone at risk of contracting the Covid-19 virus, screening of goods and crew has intensified to limit the spread. This means more time is spent in ports which leads to significant delays . One delay has a knock-on effect, as schedules are impacted down the line, and we are now seeing delays at most ports around the world. Delays in cross-border trucking are also leading to delays at ports, with ships having to wait for goods to be trucked to the ports, as well as to forfeited shipment slots. On the clearing and forwarding side, some ports have skeleton staff operating, which is causing delays in that sector.
Crew changes are being closely monitored, with many ports having stopped crew changes completely. As expressed by Wilhelmsen Ship Management, their decision to defer their crew changes for a few months was as a result of “Difficulty in mobilizing crew due to the lockdown situation in a number of major seafaring nations and movement restrictions in many countries.” They also cited this decision as mitigating the risk of contamination of other crew members. “Though crew screening measures are in place prior to mobilizing crew, we feel this decision would greatly mitigate the risk of contamination of other crew onboard coming from on-signers.”
Each country has implemented their own port restrictions for its ports.
Some common port restrictions we are seeing are:
- 14-day quarantine for all ships coming from China
- Temperature checks and screening of crew
- Not accepting cruise ships at the port
- Upon arrival at the port, crew are to remain on board until otherwise notified
When it comes to goods entering and leaving ports, we are seeing less significant change, as governments do their best to avoid too much disruption to the supply chains too. Initially, in South Africa, only essential goods were allowed to be imported and exported. This has since changed and now all goods are allowed to pass. The delays caused though were initially extremely costly to all parties. At the time of writing, our research shows us that most ports are doing their best to operate at close to normal levels, but still prioritizing essential goods over non-essentials. Strict health and safety protocols appear to be in place to protect staff members.
In South Africa, all Commercial Ports will remain open for cargo work and stevedore operations will continue in all ports. These are located in Cape Town, Saldanha, Mossel Bay, Port Elizabeth, East London, Port of Ngqura, Durban and Richards Bay. All types of cargo will also be allowed to be loaded and offloaded, but with greater priority being given to essential cargo items.
Impact on availability of goods in stores
Many countries will be seeing a decline in goods imported from China, which will mean they will have to source these items from local suppliers instead. This has shown to be having a positive impact on many local businesses, especially in South Africa, even during lockdown. When it comes to food products in South Africa, consumers can expect these to remain much the same as these are not the main export from China. However, for businesses that import retail consumer products such as plastics and some FMCG goods, and also heavy equipment such as tools, building equipment, can expect huge stock shortages and long delays when the country returns from lockdown. Was there some merit to President Trump wanting to bring their manufacturing back home to USA? Perhaps there is a lesson or two to be learned here.
Other Shipping Services Impacted
Cruise ships have also been impacted by the Covid-19 pandemic, and many have been criticized for not taking precautions and actions soon enough. Despite dozens of fatalities of both passengers and crew being linked to virus outbreaks on many cruise ships, there are still at least 8 ships at sea with passengers as we write, including one ship was has 128 passengers onboard that have tested positive for Covid19. Experts believe that cruise ships should have stopped operations much sooner than they did. With passengers being in such close proximity on cruise ships, they are likely to have lead to a faster spread of the virus should even one person onboard have been infected. The necessity to dock and disembark these passengers at some stage then only lading to further exacerbating the problem.
Share your stories with us, as to how your shipping business has been impacted by the global lockdown.