The extended Chinese Lunar New Year holidays and ad hoc measures aimed at curbing the spread of the coronavirus are expected to reduce cargo volumes at Chinese ports, by over 6 million TEU, according to Alphaliner’s estimates.
The analyst said in its weekly newsletter that the volume contraction is expected to reduce global container throughput growth by at least 0.7 percent for the full year.
“The full impact of the Chinese coronavirus outbreak on container volumes will not be fully measurable until ports announce their throughout numbers for the first quarter, but data collected on weekly container vessel calls at key Chinese ports already shows a reduction of over 20 percent since January 20, 2020,” Alhaliner’s newsletter further reads.
Carriers are continuing to blank sailings in February accounting for reduced cargo volumes.
Voiding of sailing is expected to continue until mid-March, hence, Alphaliner expects that any cargo volume recovery could be negatively affected even after the end of the holidays.
Despite the ongoing situation, carriers are continuing normal cargo loading and unloading operations at all Chinese ports except at the port of Wuhan, amid the city lockdown.
Wuhan handled 1.7 million TEUs of container cargo in 2019, accounting for o.6 percent of total Chinese port throughput.
The coronavirus threatens not only the Chinese economy but potentially that of the entire world.
“The Chinese government will need to initiate far-reaching stimulus measures to counteract the economic effects of the virus once it has been contained. China has already halved tariffs, from 5% to 2.5%, on USD 75 billion worth of imports from the US, originally implemented in September 2019,” BIMCO predicts.
“Other countries in the region, such as Japan and South Korea – both of which saw low growth in 2019, with Japan’s falling by 6.3% in Q4 2019 on an annualized basis – could feel the knock-on effects of the coronavirus crisis. It has the potential to harm both countries’ exports and disrupt supply chains, given the interconnectedness of manufacturing in the region.”
As factories and offices in China remain closed for prolonged periods BIMCO believes this might also affect the implementation of the Phase One agreement between the US and China, especially if China finds itself unable to increase its imports from the US by the amounts detailed in the deal.
“While demand for containerized exports out of China depends on other countries, the prolonged shutdown in the country’s manufacturing sector limits its ability to meet this demand, thereby harming the containerized shipping sector,” the association said.