Covid19 is a virus that started in Wuhan, China, in late 2019. Since then, it has evolved into a global pandemic. Now our day to life has changed drastically because of Covid19. Economies are collapsing. Oil prices are dropping. The world is changing because of this issue. One sector that is mainly affected by this shipping industry.
Let us see how the shipping industry will be affected by this pandemic. Already there are quarantined cruise ships, port restrictions, disrupted supply chains, job loss because of covid19.
Because of the collapse in the Chinese manufacturing sector, orders for china supplies have reduced, and a slump in demand for their goods affected container shipping and Oil both. The cruise ship industry affected badly because of the drop in the tourism industry, and few whole ships got quarantined. Some countries like Australia refused ships from china entering their ports. But China is now on the path to recovery. Epic center of the disease is now moved on to Europe and the USA.
For the first time in history, oil prices turned negative. Demand for Oil has dried up as countries are locking down. The tanker shipping industry will hugely affect by this. Oil firms are resort to renting their tankers to store surplus oil supply. This could lead to an increase in tanker demand because some countries might try to fill up their oil reserves to get the advantage of the price drop. And they will store Oil in tankers to take advantage of a spike in oil price.
Oil Fuel bunkering prices will drop because the oil prices are low. Fuel is one of the main expenses in shipping, so the shipping industry can gain huge profits from this. In my opinion, this is the time for the world to change and move for other renewable energies that can be used in shipping. Because as you can see now, pollution can drastically be reduced by stopping the use of carbon fuel.
Another problem caused by coronavirus is crew members getting stranded in other countries. Some countries take measures to rescue such crew members like Sri Lanka took one of their crew members from an Italian cruise ship once it came to Colombo port. But there are lots of crew members that are stuck in different countries because of this situation.
In the future Covid19 epicenter could be moved into south Asian countries like India. Or there could be new waves of disease in Europe. In a time like this, most of the airports and seaports are in lockdown. Supply chains are getting interrupted. Supplies for the manufacturing sector will provide below. It will lead to a shortage of medical supplies, food, and many other essential supplies.
Freight rates will drop with the disruption of the supply chain. Small shipping companies will face huge difficulties with this. There will be extra expenses for shipping lines because of Covid19. There could be lawsuits, insurance issues delays in delivering goods, and they also need to take precautions for the welfare of their employees.
Many employees will be unemployed before this situation can be controlled. Freight forwarding services, bunkering, ports employees, insurance agents, security services, many areas that depend on shipping will be affected because of this. It could be manufacturing factories that are closed because of not enough supplies to sailors working on ships. Many people will lose their jobs if this continues.
GENEVA (ILO News) – The economic and labor crisis created by the COVID-19 pandemic could increase global unemployment by almost 25 million, according to a new assessment by the International Labour Organization (ILO).