Following the declaration by the World Health Organization (WHO) on 30 January of a Public Health Emergency of International Concern (PHEIC) in response to the coronavirus crisis , the virus COVID-19 – has been spreading globally, causing disruption to trade and travel.
As the global coronavirus spread continues, various stakeholders with vested interests in affected countries (N.B. the list continues to grow!), including importers, exporters, and business travelers, are expected to experience large-scale disruption to their businesses. The shipping industry is one of the most exposed industries to the consequences of COVID-19.
The severe outbreak in Asia in the last few months could result in a large-scale disruption of the shipping industry globally, since the continent is home to some of the world’s most important container ports: according to the UN Conference on Trade and Development, seven out of the world’s ten busiest container ports are in China alone, with other Asian countries, such as South Korea, also hosting ‘mega’ ports.
The reduced number of port calls in China in recent weeks is testament to the disruptive effect that the coronavirus outbreak has had on the shipping industry. According to the Windward Maritime Analytics, the number of vessels calling at the ports in China during the first five weeks of 2020 plummeted, with a 20% decline in Week 4 (i.e. the Chinese New Year week) as compared to Week 3. The Chinese New Year period usually sees a slight slow-down in activity, however, the figures for 2020 are quite unprecedented and cannot be explained by seasonality alone.
Demand for vessels has been curtailed with many Chinese factories being closed down beyond the end of the Chines New Year holidays due to the virus outbreak. For example, several giant shipping companies have reduced the number of vessels on routes connecting China and Hong Kong with India, Canada, the United States and West Africa. Some logistics companies have advised customers to consider shifting shipments from China to air cargo.
Outside of China, cargo volumes at ports in the U.S. are also anticipated to be down by 20% or more on a year-on-year basis (as compared to 2019) due to the coronavirus outbreak: the Port of Los Angeles has reportedly already canceled 40 sailings to the port from 11 February 2020 to 1 April 2020, which results in a drop of 25% from the typical shipping volume.
Given the continuous development of the coronavirus outbreak globally, it is necessary to follow the introduction of any unilateral measures that governments in various countries may implement. These could include restrictions on travel, additional checks and quarantine procedures, closing down of entry points, personnel reductions in public offices, etc. Such measures may cause practical difficulties and negative impact on trade. Manpower shortages alone, resulting from reduced working hours or employees not being available due to sickness, can lead to disruptions to laytime and customs clearance.
It is evident that businesses calling at various ports around the world have already experienced delay and disruption due to the coronavirus outbreak. For example, the port of Annaba, Algeria, notified all local agents that all vessels that called at Italian ports prior to arrival will be put on quarantine until a licence certifying that the vessels are free from infectious diseases is obtained. Moreover, some countries, such as Australia, refuse to allow ships that recently called at Chinese ports to enter the Australian ports until the crew is declared virus-free