Coronavirus takes toll on port cargoes, global supply chains
American ports have been severely hit by the reduction in shipping from China due to the coronavirus outbreak, with officials reporting that cargo volumes are likely to drop 20 percent for the first quarter of 2020. Combined with the virus’ impact on other forms of transportation around the world, supply chains likely will be disrupted for months.
As Professional Mariner went to press in mid-March, there had been no reports of coronavirus (COVID-19) among commercial crews arriving at U.S. ports, excluding cruise ships. Ironically, because of the time it takes for sailings from China to North America, most cases can be detected before the ships arrive in port (see sidebar).
While non-cruise ship crewmembers have not yet been impacted, the virus has taken a heavy toll on overall container volume. An informal survey of U.S. port officials shows that the average decline will be about 20 percent, according to Aaron Ellis, spokesman for the American Association of Port Authorities.
In Savannah, Ga., where Chinese imports total $19.8 billion a year, officials expected a 40 percent decline for March, Ellis said. In early March, officials at the Port of San Francisco said they expected 23 sailings to be canceled in the next five weeks, cutting cargo 25 percent compared to the same time last year.
The Port of Virginia anticipated an 11 percent decline in container traffic between February and April, and the South Carolina Ports Authority expected a 15 percent drop in container volume for March and April. Containership operators canceled 40 sailings to the Port of Los Angeles between Feb. 11 and April 1, with most of these voyages originating in China. Cargo volume in the port was expected to decline 25 percent for February.
It’s not just the initial drop in container volume that will harm trade. The entire just-in-time supply chain has been disrupted, and it could take several months to recover.
Heavy traffic from China before its two-week new year celebration, followed by a production decline due to the coronavirus, meant that “a substantial number of empty containers” piled up in Europe and North America, Ellis said. As the virus tapered in China in March and factories there ramped up production, goods began building up at Chinese ports as they awaited empty containers to be shipped back.
“It’s going to take a few weeks to clear out the backlogs, and that translates to a ripple effect. (It) could take months before everything is more or less back to normal,” Ellis said.
Peter Sand, a shipping analyst at the Baltic and International Maritime Council (BIMCO), said the group expected “a gradual recovery only — we do not see a massive boost of cargo coming back to the market” in the near term.
“These are global supply chains,” he said. “There are so many actors involved in this, from the average truck driver to the main global liner. And they all need to make their decisions in order to bring capacity back into place and to get back to work.”
Then there was the question raised by many of whether the cargo itself can transmit the disease. “Is the virus transmitted by touching a contaminated surface, or is it just person-to-person contact?” said Lawrence Brennan, who teaches maritime law at Fordham University in New York City.
However, according to the federal Centers for Disease Control and Prevention, coronaviruses have poor survivability on surfaces. “There is likely very low risk of spread from food products or packaging that are shipped over a period of days or weeks at ambient, refrigerated or frozen temperatures,” the CDC states on its website.