Covid-19 creates "perfect storm" for global container shipping

Global shipping lines are facing ever-growing backlogs and delays as a result of the coronavirus pandemic, putting a strain on supply chains and potentially disrupting global trade.

Representatives from the container shipping industry - the backbone of international trade - say the sector is under intense pressure due to a combination of staff sickness, social distancing and quarantining, as well as rocketing consumer demand and disruption to factory production caused by lockdowns.

Lars Jensen, chief planner for Maersk Line, the world's largest container ship container, told FT that there was a "perfect storm" from reduced capacity and rising demand.

“There’s congestion in terminals,” said Jensen. “There’s a shortage of truck drivers because some have not been able to drive. Particularly out of Asia, we see a part of that is linked also to the fact that a lot of companies are restocking.”

This leads to a slowdown in productivity, which “delays more ships, then we get a vicious circle”, Mr Jensen said.

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At some key ports around the world, vessels are waiting to berth. Earlier this week, the Marine Exchange of Southern California - which monitors the two largest container ports in the US, Los Angeles and Long Beach - reported 17 container ships at anchor, awaiting berthing instructions, with another four due to arrive shortly.

A record import volume was reported at the port in October - 506,613 containers in total, up by a third from the same period in 2019.

As a response, shipping companies are being forced to cancel orders and divert vessels.

“The entire supply chain is under pressure,” Rolf Habben Jansen, chief executive at Hapag-Lloyd, another of the largest container shipping companies, told FT. “The market situation is extraordinary.”

Outbreaks of Covid-19 can swiftly disrupt a port terminal’s productivity by forcing large numbers of staff to isolate, he said.

Read more: Major Baltic seaport to be expanded

“We’ve had examples where in a port 600 port workers were put into quarantine . . . [Even] if that port was on top of its game, then within a week you have 10 vessels struggling to get alongside [the terminal’s quays].”

Pressure has been mounting since the beginning of the pandemic. As the coronavirus began to spread, global trade contracted at an unprecedented rate and shipping lines cancelled countless journeys. 

With the rebound in trade in recent months, demand for products shipped from Asia has built up and shipping lines are operating close to full capacity. 

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