Clarkson Research is reporting that container shipping faces its most significant drop in teu-miles ever.
“The container sector seems amongst the most exposed to the impacts of Covid-19, with consumer demand in key regions under significant pressure, and the decline in box trade in TEU-miles in 2020 (projected at -10.3%) expected to be the steepest on record,” researchers at the London-headquartered outfit wrote in the company’s most recent weekly report.
The data is backed up from Tokyo today where Nippon Yusen Kaisha (NYK), the lead shareholder in container line Ocean Network Express (ONE), reported its full year results. On the box outlook, NYK reported: “Recently, cargo volumes on the North America and Europe trades have fallen by more than 20% as a result of the contraction in economic activity following the city-wide lockdowns in the US and Europe. However, they are expected to start to gradually recover, and looking at the full-year average, cargo volumes are forecast to fall by slightly over 10% compared to last year.”
Commenting on the Clarkson data, Lars Jensen from SeaIntelligence Consulting, told Splash today that in terms of demand, the decline in box volumes this year is set to match the impact of the global financial crisis. However, unlike for the financial crisis, freight rates are holding firm, Jensen said.
“The outlook for 2020 cannot at this moment be said to be as bad as what we saw a decade ago from a profitability perspective,” Jensen stressed.
For more in depth analysis of the troubled box trades, subscribe to Splash Extra with the May issue – due out on Wednesday – featuring a significant cache of container-related data. Subscription details are available here.