Evaluating the Impact of Covid-19 on Global Shipping and Trade
Covid-19 has disrupted pretty much every sector in the world, including the container shipping industry. One of the medium to long-term negative impacts of the pandemic is an economic downtrend that will possibly be the most significant global recession after World War II.
Impacts on Global Supply Chains
The supply of essential goods, for example, medical products and foodstuffs, have remained resilient since the outbreak of Covid-19. However, there has been a significant impact on the demand for durable goods such as cars. As customers reduce the need for such products, corporations cut down on production costs, reducing inventory levels. Economic restrictions, for example, lockdowns and the closing down of vital distribution facilities like airports, are additional coronavirus production challenges facing the shipping industry. These declining production and supply changes negatively impact merchandise trade, subsequently causing the material economy to collapse.
The Shipping Industry’s Recovery From Covid-19
Although Covid-19 has dramatically affected the shipping industry, the gradual easing out of lockdown has caused noticeable regional recovery, especially in the third quarter of 2020. For example, Hong Kong reported a 4.1% increase in August 2020 weekly ship port calls than 2019 when the outbreak had just begun. However, the trends vary depending on the pandemic’s progress: Continents such as Africa, where coronavirus’s onset happened later, experience delayed impacts. Governments are learning measures of tracking and containing the spread of coronavirus. The shipping industry is becoming more resilient to face future crises.
Response to the Covid-19 Impact
The pandemic has caused a structural imbalance in the market, exposing the shipping industry’s unpreparedness to manage emerging challenges. These impacts have forced different shipping companies to adjust their operations and invest in risk management strategies to help cope with disruptions and ensure future stability in the industry. The pandemic has also promoted electronic documentation in the shipping industry, embracing a more environmentally sustainable economy that is less dependent on paper.
As the pandemic continues, it is essential to observe WHO guidelines including avoiding unnecessary contact with products to reduce the virus’s spread. Contact us for cost-efficient methods of cargo handling with limited human contact to help sustain global distribution.