Actual measurements of the demand impact on container trade still do not exist. All the data sources which measure this are time-lagged and hence the only entities knowing the actual data are the carriers. They will of course be well aware when looking at their own booking data, but they are not sharing such data.
However, their actions in terms of blank sailings allows for an estimate of the impact. This is elaborated upon in the Sea-Intelligence Sunday Spotlight this week. Essentially the Corona-related blank sailings are an indication of the shortfall in demand. The blank sailings can be compared to the usual blank sailings from Chinese New Year. We can measure the usual volume shortfall from Chinese New Year. These three components can be combined, and that leads to the estimate that the Corona virus is resulting in a volume shortfall of 1.7 Million TEU.
The loss in volume leads to not only a loss in revenue but a negative impact on the carriers’ cashflow. If we for simplicity assume an average payment time of 2 months, this means an adverse cashflow impact for the carriers in Q2 2020.
If we do get a V-shaped recovery this would coincide with a likely boom in volumes in Q2 as manufacturing plays “catch-up” and hence the carriers should be able to manage this cashflow impact nicely.
However, if the virus spreads and we see further negative impact on volumes this could lead to a problem for carriers in a financially weak position – especially for those whose volumes are highly depending on Chinese cargo.
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