Friday, April 17, 2020

Second Global Port Survey Looks at How the Covid-19 Virus is Affecting Traffic Flows

Wide Variations Between Regions Mean Shortage or Surfeit of Trade and Space
Shipping News Feature

WORLDWIDE – The International Association of Ports and Harbors (IAPH) has released the results of the second Covid-19 Port Economic Impact Barometer on the World Ports Covid-19 Information Portal under the question 'What is the Economic Impact on the Global Port Sector? ' and the survey responses show a mixed picture.

Several ports report an increase in port and terminal utilisation due to an uptick in the imports of essential goods, such as grains such as rice and wheat. Stockpiling practices of importers have also emerged and, as a result, a major increase in capacity utilisation for these deliverables is not uncommon. Other ports reported strategic storage of liquid bulks by traders in anticipation of future commodity price developments.

Conversely, where strategic storage is not taking place, ports have reported dips in liquid bulk cargo, especially for imported fuels and power generation-related products. This has been either due to low consumer demand (e.g. petrol for cars) or due to a lack of industrial production and a mild climate causing falling demand for heating oils.

One sector critically affected is the automotive industry. As dealers fail to collect their new cars due to a collapse in sales, overcrowding of relevant storage areas near some quaysides has been reported. At the other end of the spectrum, some ports report that conventional cargo storage has dipped significantly, a phenomenon which has been reported before the Covid-19 outbreak. Similarly ports report less or no vessels carrying cement and sand in bulk as per usual volumes for the year due to the halt in construction works.

Globally 35% of ports report an increase in utilisation of warehousing and distribution facilities for foodstuffs and medical supplies, with some ports reporting capacity shortages. Last week these figures were slightly different with more ports reporting a major increase in utilisation levels (10% then vs. 2% this week) and with less ports reporting a minor under-utilisation (10% then vs. 5% this week).

The situation for consumer goods has almost remained the same, although there is an increase in the share of ports dealing with major increases in utilisation or facing capacity shortages (11% now vs. 8% last week). In the dry and liquid bulk markets, almost two thirds of the respondents see no changes in utilisation levels. The remaining ports are fairly evenly distributed between under-utilisation and increased utilisation of storage facilities. IAPH Managing Director Patrick Verhoeven analysed the situation thus:

“This time, ninety ports around the world have responded, with Africa, South America and the Caribbean being better represented than in the first survey. The total mix of ports participating has changed somewhat in terms of composition, so a week-by-week comparison should take this into account.

“We are pleased the report has attracted interest from around the world, with three regional port associations assisting us in getting more ports on board with their anonymous answers to six simple questions. In addition, we have engaged with senior representation of the Transport Division of the World Bank on a conference call to discuss knowledge sharing and cooperation.”

Further outreach to IAPH port members as well as non-members will be made in the coming week to ensure a representative sample for the forthcoming analysis. (WPSP) Port Economic Impact Barometer co-author Professor Theo Notteboom, commented:

“In the coming weeks we foresee major changes taking place in cargo flows as we begin to see the impact of blank sailings, especially in the container shipping sector on the main Asia-Europe and Transpacific trades. This will cascade into other trade lanes as well, so it’s vitally important for us to view the overall impact on port calls, operations, restrictions, port staffing, hinterland transportation and storage as well as future prospects for international trade to and from ports.”

His colleague Professor Thanos Pallis agreed, pointing out that there was a wide variation in how vessel calls, utilisation of warehousing and distribution factories, and connections to hinterland have been affected in different regions, concluding:

“Workforce practices and procedures have changed. The growing interest of ports has allowed to further detail the exact trend, and we are looking forward to report the conditions of many more in the next edition of the barometer."