LONDON: China is struggling to resume normal trade operations as fallout from the coronavirus outbreak hits container shipping lines and logistics chains, with goods stuck and costs mounting, industry officials say.
The epidemic has upended global supply chains and caused widespread disruption to businesses and factory activity in China, prompting authorities to deliver a steady stream of policy measures over recent weeks to cushion the blow to growth.
China is a vital player in the container sector, transporting everything from fresh food to phones and designer clothes as well as industrial parts.
The world’s biggest container line Maersk warned on Thursday that the coronavirus outbreak would weigh on earnings this year, adding to pressure on a sector already hit by trade wars and an economic slowdown. “We are experiencing huge pressure at (Chinese) port terminals because there aren’t enough workers at the ports to move the containers around, not enough truck drivers to move the goods, and no one to receive them at the factories or warehouses,” Maersk’s chief executive Soren Skou told reporters on Thursday.
“We have lots of ships laying idle in Asia, because we have cancelled many loadings out of China in the last two weeks.” The world’s number two container line MSC said the discharge of refrigerated reefer containers was also affected due to problems with power sources.
“The blanked sailings and reefer congestion issue are likely to contribute to a shortage of containers in some regions,” an MSC spokesperson said, referring to cancelled port calls.
The MSC spokesperson added that a surge in demand for containers was expected when production capacity in China returns to normal.
Shipping consultancy Alphaliner estimated that 46 per cent of scheduled departures on the major Asia to north Europe route had been cancelled in the past four weeks.
“We are beginning to see the impacts in terms of trade flows,” said Richard Ballantyne, chief executive of the British Ports Association trade body.
Published in Dawn, February 21st, 2020
