<\/p>\n
According to liner analyst SeaIntelligence Consulting, the possibility of a 10% decline in global container shipments \u2013 which would equate to 17m teu carried by the world\u2019s box shipping fleet and some 80 teu handled in global container ports \u2013 has \u201cunfortunately moved closer to reality\u201d.<\/p>\n
<\/p>\n
SeaIntelligence Consulting chief executive Alan Murphy said: \u201cEconomists at Goldman Sachs are now forecasting a staggering 24% decline in US GDP in the second quarter of 2020.<\/p>\n
<\/p>\n
\u201cWe also have US business inventories being 10% larger than just before the financial crisis, when they are compared to the magnitude of sales \u2013 and during the financial crisis, inventories were reduced by 18%.<\/p>\n
<\/p>\n
\u201cOn top of that, we are seeing restrictions in ports, a few even banning vessels if they have been in virus-afflicted countries or shutting down temporarily when they find workers who have tested positive for the virus,\u201d he added.<\/p>\n
<\/p>\n
The year\u2019s first decline in container volumes was expected \u2013 the Chinese New Year holiday is an annual slump in container shipping\u2019s diary, but as coronavirus infections grew in Wuhan, the Chinese authorities extended the two-week factory shutdown until it could bring the outbreak under control.<\/p>\n
<\/p>\n
Hopes that this might lead to sudden surge in purchase orders being sent to Chinese producers were short-lived, however, as infection numbers grew in Europe and the subsequent hit on demand has become more obvious.<\/p>\n
<\/p>\n
Mr Murphy also warned that the sudden precipitous drop in oil prices, which, on the face of it a welcome respite for the sector, could undermine the industry\u2019s long-term quest for balance between supply and demand.<\/p>\n
<\/p>\n
The problem is that the decline in oil prices has led to the differential between high-sulphur fuel oil (HFSO) and low-sulphur fuel oil (LSFO) reducing sharply. At the beginning of the year, as the IMO\u2019s new low-sulphur regulations came into force, the difference was $300 a ton, today the difference is just $60.<\/p>\n
<\/p>\n
This has meant the economics of investing in exhaust gas cleaning scrubbers have, effectively, been thrown out of the window and may lead numerous carriers cancelling scrubber retrofit orders, which in turn could mean more vessels on the water looking for cargo and, ultimately, a sharp decline in freight rates.<\/p>\n
<\/p>\n
Mr Murphy added: \u201cAt the same time, scrubber installations are seriously delayed in China due to the virus. The consequence might well be that vessels which were otherwise planned to go for scrubber installation instead re-enter the operational fleet.<\/p>\n
<\/p>\n
\u201cThis would add more capacity to a situation where demand is about to drop sharply.\u201d<\/p>\n
gCaptain<\/p>\n","protected":false},"excerpt":{"rendered":"
According to liner analyst SeaIntelligence Consulting, the possibility of a 10% decline in global container shipments \u2013 which would equate to 17m teu carried by the world\u2019s box shipping fleet and some 80 teu handled in global container ports \u2013 has \u201cunfortunately moved closer to reality\u201d. SeaIntelligence Consulting chief executive Alan Murphy said: \u201cEconomists at …<\/p>\n","protected":false},"author":1,"featured_media":6681,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[1034,3644,1320,2648,3645,3646,62,1259],"class_list":["post-6680","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-marine-world","tag-coronavirus","tag-decline","tag-largest","tag-lead","tag-living","tag-memory","tag-shipping","tag-volumes"],"_links":{"self":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts\/6680","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/comments?post=6680"}],"version-history":[{"count":0,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts\/6680\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/media\/6681"}],"wp:attachment":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/media?parent=6680"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/categories?post=6680"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/tags?post=6680"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}