LONDON: As the coronavirus (COVID-19) sweeps across Europe and the US causing widespread disruption and lockdowns container shipping could see a loss of 17 mn TEU of cargo in 2020.

Analyst Sea-Intelligence said in its latest newsletter that container shipping could be looking at developments similar to the globally financial crisis in 2009 which implies a volume loss of 10% or around 17 mn TEU in 2020.

The analyst warned that as a result there was a “realistic risk of bankruptcies”.

“The real underlying problem is the impact this will have in the longer term in 2020 and possibly beyond, on not only consumer spending but also on the willingness of companies to order goods in the first place – as well as their ability to do so, as we are also seeing a possible financial liquidity problem begin to appear,” Alan Murphy CEO of Sea-Intelligence said.

The analyst noted two positives for container shipping. One was the collapse in the price which sees lines getting a short term cash boost from bunker surcharges implemented on the basis of fuel prices in January, while paying much less for fuel now. The second positives was the discipline which carriers had shown in blanking sailings when the coronavirus was at its height in China and consequently did not dump freight rates.

“This means that until now rates have been relatively stable despite the coronavirus impact from China and might well also be through the coming period if we see a new raft of blank sailings,” Murphy said.