Global Maritime Trade on the Path to Recovery
According to data by the United Nations Conference on Trade and Development, the number of ships calling at ports to load and unload cargo has increased in Q3 2020. This hints to improved business activity and economic recovery from the global pandemic that struck in the beginning of 2020.
Impact of Covid-19 on Maritime Trade
Maritime shipping saw a dramatic 27 percent drop in the second quarter of 2020. This is mainly due to border and travel restrictions aiming to control the pandemic. UNCTAD reports an 8.5 percent drop in the number of container ships calling at ports in July alone.
The number of vessels arriving at ports around the world plummeted to about 8,700 on a weekly basis. Data by the European Maritime Safety Agency also shows that sea freight in Europe has been hard hit, with the number of ships calling at EU ports dropping by 16.5 percent by mid-2020. The agency explains this drop with lockdown measures and restrictions on movement of crews and passengers.
Maritime transport has been affected across different ship categories, including vehicle carriers, oil and liquefied gas tankers, general cargo ships, and bulk carrier vessels. The largest decrease in traffic is for ro-ro/passenger, ro-ro, and cruise ships. Countries that have been the hardest hit include Spain, Slovenia, Iceland, and Croatia. EU ports that have been the most severely impacted due to drop in traffic are Marseille, Barcelona, and Algeciras.
Signs on Recovery
Recent reports show that the number of ships calling weakly has increased to 9,265 in August 2020. This is just a 3 percent drop compared to August 2019. Trade volumes vary by region, however. The number of ships arriving in Hong Kong and China has increased by 4.1 percent than 2019. Calls in Europe and North America have dropped by 13.2 and 16.3 percent, respectively, compared to last year. At the same time, a report by the European Maritime Safety Agency published on 11 September highlights the fact that positive trends can be observed since mid-July. Ships flying the flags of EU Member States and calling at ports worldwide have increased in number in weeks 31 – 35. In week 36, the number of calls increased for vessels flying the flag of Norway (39 percent), Estonia (26 percent), Portugal (16 percent), and other EU countries.
Factors Affecting Maritime Trade
While the Covid-19 pandemic dealt a major blow on maritime trade, there are other factors that have an impact on the global supply chain. These include decisions made by shipping alliances and regulatory measures and changes in trade policies. The expectations and estimates of shipping companies about demand also play a role. If demand is lower than anticipated, carriers may choose not to call at certain ports (blank sailings). Experts also warn about an emerging trend of circular dependency. Shipping companies use economic forecasts to make decisions regarding schedules while economic forecasts are in part informed by carrier timetables.