Tuesday, January 28, 2020

How Will the Coronavirus Affect the Container Freight Trade?

China is the Epicentre for Global Box Shipping
Shipping News Feature

CHINA – WORLDWIDE – With news of the Coronavirus epidemic in Wuhan everyone is talking about a disease capable of becoming a global pandemic with, as we write around 4,500 confirmed cases and over 80 deaths. So how will this terrible event affect the shipping industry, emanating as it does from the source of most of the world's container freight trade?

Container XChange has taken a look at figures from its Container Availability Index (CAx) in a situation which has now become so serious that the Chinese authorities expanded the New Year celebrations from one day to three. Such circumstances have the potential to have a huge impact on shipping and container logistics, with downsides from decreased vessel demand outweighing any positives from fleet inefficiencies by far.

The Index takes millions of data points, from transactions on xChange, as well as globally available tracking data, into account to forecast the availability of equipment for most of the biggest port locations. Looking at the world’s biggest container port, Shanghai, CAx shows relatively high values for 40’ High Cubes (HCs)-(0.58), 40’ Dry Cargo (DCs)- (0.46) and 20’ DCs (0.62). Every number above 0.5 indicates a surplus of equipment, meaning that containers are piling up in Shanghai right now and should be easy to get for container users.

Looking back at the last two years, we can see container availability growing by 10% from 2019 and by even 17.7% from 2018. However, the container availability forecast shows similar values for 40 HCs (0.55), 40DCs (0.17) and 20DCS (0.55) for Qingdao, but indicating a smaller number of containers available, with XChange suggesting this may be because companies are still trying to get their cargo out of China from a port 300 kilometres by road further away from Wuhan?

Photo: This drone shot from a central point in Wuhan shows deserted roads normally thronged with traffic.