The collapsing economy is causing shipping companies to scale back their liner services. Individual companies must already be supported by the state. Price increases have already been announced for the summer.
The global economic downturn is exemplified by the shipping industry. Large shipping companies such as OOCL, APL or CMA-CGM continue to cut back their liner services, especially on the transpacific and North Atlantic routes. But also feeder services, for example to Northern Europe, Spain and Italy, are being thinned out or completely eliminated. On some routes, only 70 percent of the capacity previously offered is still in use. The consequence: rising rates on the spot markets in May as well.
The price increases will not be a short-term phenomenon. Major players such as Maersk, Hapag-Llyod and CMA-CGM have already announced price increases for the peak season - despite lower industrial production worldwide, declining consumption and lower oil prices. The consequences of the Corona crisis, economists are now convinced, will be felt for longer than initially hoped.
Billions in aid for ailing shipping companies
The financial leeway of shipping companies is shrinking noticeably. Although the market leader Maersk only announced solid figures for the first quarter in mid-May, it is looking at the second quarter in the black: the Danes are expecting a decline in freight volume of a quarter. Competitors such as CMA-CGM or Yang Ming are already resorting to government support loans worth billions, Hapag-Lloyd wants to make ends meet with a savings programme. A restructuring of the liner services and a consolidation of the providers therefore seem more likely.
The positive side remains positive: With few exceptions, the ports are functioning worldwide. Even in countries severely affected by corona, such as Spain and Italy, cargo handling is assured. There are currently notable difficulties in India, South Africa and Malaysia. However, the situation is gradually improving there as well. Whether the Covid-19 diseases that have occurred in Brazilian ports will lead to service interruptions is not yet clear.
The problem of gloabl empty containers that are not distributed according to demand has now been reduced. Bottlenecks and higher prices only become apparent far away from the major economic centres when containers have to be transported over long distances overland. A reliable estimate of their own transport volume is rewarded by the shipping companies.
Latest update: 15th May, 2020