The world’s coronavirus pandemic continues to take its toll on parts of the global economy, but the international shipping industry has rebounded in a way that surprises many observers.
In early 2020 when COVID-19 first made its mark on the world, the ocean shipping lanes across the globe quickly felt the impact. One by one, national economies began shutting down. International trade took a huge hit. Global lockdowns in the U.S. and Europe, the biggest markets for Asian imports, led to a steep drop in May in traffic of seaborne containers, according to The Financial Times.
Instead of millions of containers crossing the oceans with everything from expensive automobiles to fresh fruits needed to satisfy the global supply chain, much of the international shipping fleet remained idle and tens of thousands of sailors were out of work.
Not only as the global economy adjusted, but the shipping companies quickly did as well. As more people stayed home, a surge in e-commerce helped increase demand for products. And as that demand increased over the summer when the worst of the first COVID-19 wave had passed, international trade continued a steady climb that helped increase the number of shipping containers crossing the globe.
At the same time, shipping companies took steps to address the new pandemic reality. They pulled some of their fleets out of service, according to The Times. They also focused on serving shorter shipping routes with smaller vessels, a cost-saving move that helps reduce capital and labor expenses.
While shipping activity hasn’t rebounded to 2019 levels, the industry has seen a dramatic improvement since its collapse in the spring.
What’s not clear is how the ongoing pandemic will continue impacting international trade. In the second quarter of 2020, after the initial economic impact of shutdowns across the world led to a sharp 19 percent plunge in global trade from the same period in 2019, uncertainty fueled concerns about economic recovery.
A recovery in the third quarter, however, helped ease some of those fears. Global trade experienced a more modest decrease of 5 percent in the third quarter of 2020 compared with the same period last year, according to the Global Trade Update from the United Nations Conference on Trade and Development. The UNCTD’s early estimates suggest continued improvement through 2020, although still, a frail recovery expected, with a 3 percent drop in global trade compared to the same fourth-quarter period in 2019.
A recent spike in COVID-19 cases across the world could take its toll on the global economy and, by extension, the international shipping industry. But so far, countries in Europe, Asia, and elsewhere have not responded as dramatically as they did in early 2020 by completely shutting down commerce and forcing residents to stay home except in only the most urgent cases.
Despite record-breaking coronavirus activity reported in the U.S. in recent weeks by the federal Centers for Disease Control and Prevention, none of the states have implemented shut-down orders as they did early in the pandemic. And President-elect Joe Biden has said he does not envision a complete shut-down order for the country, instead suggesting such orders would only be issued in those regions suffering the greatest spread of the virus.
Although the future impact of COVID-19 remains unclear on the global shipping industry, there is optimism in steps taken by shippers and the lessons learned by policymakers early in the pandemic
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