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The coronavirus pandemic has undoubtedly impacted all aspects of
life in 2020 and looks to continue significantly into 2021 with
many countries still facing serious restrictions. This report
summarises the effects of COVID-19 on the Maritime Industry so
far.
Global Economic Conditions
COVID-19 hit the global economy hard. With lockdowns, reduced
demand, increased unemployment and debt, it is not surprising that
2020 saw a massive decrease in GDP with global GDP down 4.2% and a
significant drop in Industrial production (Figure 1 & 2). There
were many aspects of the pandemic that affected the maritime
industry including significant shifts in demand from normal
practice, the global lockdown and serious restrictions on normal
operating procedures. We also observed increased congestion in
ports, decreased demand for key commodities, supply chain issues
for PPE and coronavirus cases on vessels.
Maritime trading volumes took a hit with seaborne trade down by
9.5% (Figure 1) and total global trade slowing down significantly
in H1 of 2020, which was down 16% against H1 of 2019 with
significant variation between countries (Figure 3).
Figure 1: Trends in Year-on-Year % Change of Global GDP,
Industrial Production & Seaborne Trade Source: (GTA, GTA Forecasting, Global
Executive Summary)
Figure 2: GDP Growth in 2020 v 2019. Source: Global Executive
Summary (IHS Markit)
Figure 3: Total Trade Value % Change H1 2019 v H1 2020 Source:
Global Trade Atlas
Containerized Trade
Containerized trade has overall remained stable due to its high
dependence on China. China makes up a high percentage of the global
containerized trade and so China activity heavily influences the
global picture. China's containerized vessel port calls dropped 16%
in February, while they were in strict lockdown (Figure 4).
However, these strict controls meant recovery was swift in China
and the levels of calls soon returned to normal levels.
Figure 4: Number of Container Vessel Port Callings in Top 10
countries Source: Maritime Data
In the U.S. however, we can see a drop off in both shipment
count and total TEUS shipped during the beginning of 2020 followed
by recovery in H2 2020 (Figure 5). This shipping activity seems to
be in line with U.S. governmental guidelines which, following
strict measures in H1, were largely loosened in the second half of
the year. The Shipping Efficiency Index is calculated looking at
the average TEUS per Shipment each month compared to the average
TEU/Shipment value for 2019-2020. The Shipping Efficiency Index
showed low efficiency in Week 17 (April) when the US was under
stricter coronavirus conditions (Figure 6).
Figure 5: U.S. Containerized Total Number of Shipments and Total
TEU's Source: PIERS Bill of Lading
Figure 6: U.S. Container Vessel Shipping Efficiency Index in
2020 Source: PIERS Bill of Lading
Cruise Liner Industry
The Cruise Ship industry has been decimated by COVID-19 as the
travel industry stalled. During the first few weeks of the pandemic
we saw high publicity of COVID-19 cases on cruise vessels and the
subsequent quarantine restrictions. April saw the peak of incidents
involving COVID-19 on cruise liners, with nine incidents during the
month. The number of port callings of cruise vessels has massively
decreased though-out the year and shows no sign of recovery (Figure
7). The recovery of this industry is going to be slow as continued
travel restrictions limit demand.
Figure 7: No. of Port Callings of Cruise Vessels & COVID-19
Events on-board Source: Maritime Data
Tanker Industry
Within the tanker industry the crash in oil prices was the key
moment of 2020. Lockdowns and the associated lack of activity
helped to influence the low prices within oil sectors, with unit
prices dropping to as low as 29 US$ per barrell. While prices
continued to fall, we saw the rising trend of using vessels as
floating storage (Figure 8). This altered the supply and demand
balance in 2020 with the number of laden tankers rising above that
of ballast globally in April & May.
Further impacts on the tanker industry included an increasing
level of congestion outside ports as COVID-19 restrictions slowed
down Port Activity (Figure 9).
Figure 8: Increasing usage of vessels as floating storage over
2020 Source: Commodities at Sea, Liquid
Bulk
Figure 9: Number of tanker vessels anchored globally compared to
the three year average Source: Commodities at Sea, Liquid
Bulk
COVID-19 Impact on Safety & Operating
Conditions
There were reports throughout the year of the many issues for
crew caused by COVID-19. These included crew members stranded due
to quarantine restrictions and longer working periods at sea.
Hence, we also observed an increasing number of crew and passenger
events linked to COVID-19 on vessels throughout 2020 with up to 20
incidents a month at the peak (Figure 10). These have begun to
reduce throughout Q3 and Q4 as better testing and restrictions take
effect.
Figure 10: COVID-19 Related incidents on Vessels in 2020 Source:
Maritime Data
Port State Control inspections are routinely carried out to
determine the condition of vessels both in terms of physical
defects and crew conditions. They ensure vessels are maintaining
high safety standards for the crew onboard. We observed a drop in
the number of PSC inspections throughout 2020 as inspectors
struggled to board vessels, leaving potential defects or issues
undetected.
Figure 11: Port State Control Inspections & Detentions
Source: Maritime Data
Looking forward
Forward planning with COVID-19 has proved difficult, with new
variants, restrictions and long-term effects proving hard to
predict. The Global Trade Atlas Forecast suggests recovery for the
maritime industry in 2021 with seaborne trade forecasted a 6.9%
growth rate from 2020 to 2021 (Figure 12).
Infection rates will remain high in January while effective
treatments will be widely available in the first half of 2021.
Fully approved, effective vaccines will be available to large
populations across several countries in mid-2021.
Financial stresses of households and businesses, crowd
avoidance, eventual withdrawal of fiscal stimulus have potential to
impede the post-crisis recovery.
Possible Economic risks that may give cause for concern include:
potential for a more severe pandemic, a rise in tensions between
the US and China, rising debt levels, geopolitical conflicts, or
political uncertainties in many parts of the world.
