Orient Magazine Issue 76 - April 2020 - Page 60

Responding to COVID-19

While all industries are impacted by the continued spread of COVID-19, those companies involved in transportation and logistics have suffered disproportionately as a result of the pandemic.

Government decisions relating to travel restrictions and the increasing need for various communities to go into lockdown are having a significant downturn on the movement of people and goods.

Beyond the obvious economic consequences relating to the movement of people, the continuing crisis is straining the finances of many transportation and logistics companies as well as threatening the global supply chain.

Resilience in the face of such difficulties is challenging but governments should recognise the importance of the transportation industry and provide immediate support during these unchartered waters.

The figures

The International Air Transport Association warns that COVID-19 could cost global air carriers between $63 billion and $113 billion in revenue in 2020. Airlines may burn through $61 billion of their cash reserves during the second quarter ending 30 June 2020, while posting a quarterly net loss of $39 billion.

The situation with shipping is far more complex. Approximately 80% of world goods trade by volume is carried by sea, with China and the USA, two of the countries hardest hit by COVID-19, also being two of the largest importers / exporters of seaborne goods. The full cost to the industry will not be known for some time.

The COVID-19 outbreak and resulting quarantines have led to a record number of blank sailings, according to the latest figures from Alphaliner. Inactive fleet size has swelled to 2.04 million Twenty-foot Equivalent Units (TEUs) or 8.8% of global capacity. The decline is greater than the 1.52 million TEUs of cancelled capacity during the 2009 financial crisis, the previous record, 11.7% of the total fleet at the time. Sea-Intelligence estimates that box carriers have blanked some 50% of previously scheduled sailings since the virus overwhelmed China end-January, and that multiple carriers have enacted force majeure clauses and rates will be 'spot' until the situation normalises.

"Our analysis points in the direction that it can no longer be ruled out that container shipping might be looking at developments similar to the financial crisis of 2009," Sea-Intelligence wrote in its note. "This implies a potential volume loss of 10% equal to 17 Million TEU globally."

Key Issues, directly relating to the Covid-19 Outbreak

Workforce – Protecting the health and wellbeing of workers.

Supply Chain – Re-routing, delays, cancellations, disputes.

Sales – Decline in sales leading to

Let's Discuss...

Resilience During COVID-19

Contributed by the

Transportation Logistics

and Supply Chain Committee


Whilst the region

already consumes more than half of global energy supply, over 325 million people across Asia remain without electricity and almost two billion people still have no access to clean cooking