The coronavirus has set a new record for the amount of inactive container tonnage around the world, smashing the huge volumes of idled boxships seen at anchorages in the wake of the global financial crisis or in the months after the collapse of Hanjin Shipping in 2016.
Data from Alphaliner shows as of nine days ago the idled liner fleet had reached 2.04m teu. The previous high of 1.59m teu was set four years ago after Korea’s Hanjin folded, while a high of 1.52m teu was recorded in 2009 during the depths of the global financial crisis.
Percentage-wise, the 8.8% of idled fleet today is lower than the 2009 record of 11.7%, registered when the total fleet stood at just 13.02m teu, compared to today’s containership fleet which has grown to 23.27m teu.
More than one in two carrier departures from Asia to North Europe are being cancelled in the wake of the spread of the deadly coronavirus. Capacity reductions over the eight-week period from Chinese New Year are expected to reach about 700,000 teu according to Alphaliner, far more severe than the 340,000 teu cuts seen in the same post-Chinese New Year period last year. Capacity reductions on other routes have been similarly debilitating for global supply chains with Alphaliner estimating the Asia – Med route will reach about 290,000 teu, while 680,000 teu will be removed from the transpacific. Alphaliner has predicted the virus will reduce container cargo volumes at Chinese ports – including Hong Kong – by more than 6m teu in the first quarter of 2020.
Data from Sea-Intelligence earlier this month suggested the illness has been costing liners up to $350m in lost revenues every week.
Illustrative of the huge drop in container shipments seen around the world, something BIMCO warned last week that could soon translate into global supply outages in retail stores, the head of the largest container port in the US has said he is anticipating throughput to have dropped by an unprecedented one quarter when volumes are tallied for February.
Speaking with CNBC yesterday, Gene Seroka, the head of the Port of Los Angeles, said he expected box throughput at his sprawling Californian terminals to drop by 25% in February and by 15% for the whole of the first quarter.
In China, meanwhile, truck drivers are still thin on the ground and the People’s Republic’s ports remain clogged up with the amount of boxes waiting to be unloaded at Chinese ports remaining more than twice the recent average as the chart below from Capital Economics shows.
One measure of when China's economy is returning to normal: when the number of container ships anchored off its ports starts to fall.
— Capital Economics China (@CapEconChina) February 25, 2020