Looming crisis In SHIPPING Industry due to Covid19

Pandemic of COVID19 has greatly impacted the shipping company both directly and indirectly ,it has widely stopped the mobility and obfuscated the earnings visibility for shipping companies, worldwide the conferences are been cancelled or about to cancel like last week North America’s largest container line conference, Trans-Pacific Maritime TPM2020 had been cancelled But amidst of looming crisis the better steps needs to be taken to negate the impact to make the shipping industry work in better direction and for that stimulus packages from governments and central banks need to be continued so that global demand should be maintained.

DEVASTATION CAUSED DUE TO COVID 19

As far as the shipping industry is concerned covid19 has merely left any corner of shipping industry immune to it cruise ships are not allowed get entries at ports and put under isolation for weeks Freight rates are on plummeting due to lack in demand of commodity vessels ,even the carrying weight of the vessels are much less than what is their capacity .

Offshore drilling industry jeopardized due to demolished crude oil prices Shipbuilding and repair industry cant able to bear a brunt due people avoidance to visit China and south Korea Shipping finance sentiments are also down due to lack in mobility , charter market is also disrupted There are restriction in inter countries movement of trucks due to which trucks cant carry the load designated ports.

Financial Tantrum to shipping world

Financially unsound companies may have to go for bankruptcy till the end of this year as the supply chain and logistics has been disrupted .Finances through trade ,countries need to synergies to lower the tariff on export goods.

What Baltic capesize Index Indicates :

Almost after thirty years the indicator turned negative for the first time , Index is all about industrial activity and production as the charter rate plummeted to $2500 pd from $7000 pd and the factor of COVID19 is not only possible reason for this but such low rate is also the implication of trade war and heavy sanction has disrupted the market and declined the rates altogether.

it need to be remember that the Baltic freight indices only entertain freight for non scrubber- fitted vessels (as mandated by IMO 2020 with a January 1, 2020 deadline) Low Sulphur Fuel Oil (LSFO) vessels , which has been more costly than Heavy Fuel Oil (HFO) and effectively has led to a re-basement of the index by a few hundred points. To the extent that the Baltic indices are leading indicators, even when seasonality, extreme volatility, and adjustment for fuel costs are incorporated.

Heavily disruption globally due to jeopardized operation and short staff availability has no ramification at all . temporary solution had been made but they are only for short relief which is inclusive of outsourcing causing huge disruption in supply chain with the uncertainty looming globally. Alternate plans in a short period of time not to be made just only to pursue the economy of scale.

COVID 19 , will make globally downturn for logistics and supply chain

Trade wars , tariff imposition ,surging oil prices and sanction all these things are educating one that how interconnected we are globally which as result provide in depth multidimensional analysis to various dimension of logistics and supply chain inclusive of core factors.So to fetch result from those immense knowledge which we all have gained from the past instances need to put together and align in such a way to mitigate the link of supply chain disruption.

At last I would only like to say as soon as possible we need to put ourselves from this” black swan “ scenario , and great brains need to come together and prepare the preemptive plan to mitigate any kind of disruptions caused in supply chain and logistics which will put the shipping industry again on the right track . Hopefully before any permanent structural change occurs vaccine for COVID 19 should be prepared and pull world out from this “stress test”type situation .

# Sea And Coast Magazine