LONDON: Seaborne trade is set to drop by 1bn in 2020 due to the impact of the Covid-19 pandemic according to Clarksons, but there are signs the industry is passing “peak” impact.
In a half year assessment of the impact of the pandemic on the shipping industry Steve Gordon, managing director of Clarksons Research said: “The severity of the Covid-19 economic “shock” on the shipping industry is becoming clearer: we estimate seaborne trade fell by 10.6% y-o-y in May and our annual projections suggest trade will contract by 5.6% across 2020, representing 1bn tonnes of “lost” trade and the sharpest decline for over 35 years.”
In a sign that the industry is past the peak impact daily global port call activity index was down 7.4% in June year-on-year, compared to 9.9% down year-on-year in May. Gordon noted that port activity in China had normalised.
“Our range of recovery scenarios illustrate that huge multi-year risks remain and signal a continued difficult and ‘bumpy’ road ahead, but also the potential for further examples of disruption upside: perhaps “windows” of improved rates as markets deal with inefficiencies and large swings in month to month demand.”
The shipbuilding sector has seen a 20% decline in deliveries year-on-year but is now seeing improving productivity.
“We have also updated our comparison with the situation during the financial crisis: potentially a significantly deeper initial impact but sharper rebound; a smaller newbuild orderbook (10% of fleet not 50%); lower pre-disruption trade growth; better capitalized banks; different megatrends. Our continued very best wishes to our friends and subscribers in dealing with the Covid-19 outbreak,” Gordon said.
