Coronavirus brings turbulence to Shipping Industry
The shipping industry is on high alert amid a rising death toll in China following the outbreak of Coronavirus in Wuhan. Due to the close living quarters of both passengers and crew, ships are considered particularly at risk from outbreaks, especially since researchers are still unsure how the virus spreads and how infectious it is.
What is the Coronavirus?
The Coronaviruses is a family of infections that include the common cold, and viruses such as SARS and MERS. Common symptoms therefore include Headache, Runny nose, Cough or Sore throat and Muscle Pain. Potential complications include High fever, Trouble breathing, Pneumonia, Sepsis or even death.
According to CNN, the virus has infected more than 20,000 people in mainland China and almost 200 worldwide across 25 countries and territories. It has so far claimed 492 lives worldwide, all but two in mainland China.
Cases of Coronavirus, which is spreading in a wildly, have been also confirmed in Canada, USA, Sweden, Finland, Germany, Belgium, UK, France, Spain, Italy, Russia, South Korea, Japan, Nepal, India, Sri Lanka, Taiwan, Philippines, Hong Kong, Macao, Singapore, Malaysia, Cambodia, Thailand, Vietnam and Australia.
Coronavirus and its effects on the shipping industry
China has blocked some ships from calling at Wuhan, in an effort to contain the spreading of the virus. The Wall street Journal reported that leading local barge operators have in fact reported cargo delays caused by fewer ships entering and leaving the Yangtze River trade hub.
The Wall Street Journal also reports that, large European liners and China’s COSCO Shipping say their Chinese services are unaltered, but brokers say they have observed delays in services between Yokohama, Japan and Wuhan. In addition, some gas carriers were also held back from calling at Wuhan.
With more than 10 million barrels of crude oil being imported per day, China is the world’s second-largest oil consumer and top oil importer making it a fundamental player in the tanker shipping market.
The domestic demand for oil products has effectively taken a slump. As reported by CNN, Circumstantial evidence in fact suggests that Chinese Refinery utilisation rates have been dropping over the past week. It is easy to see why concerns about the spreading of the coronavirus has dragged oil prices down more than 2% and with it also brought a turbulent effect on the tanker market.
Combined with the enforcing of the IMO2020 legislations, the slowdown of the Chinese economy due to the prolonged shutdowns in the industrial sectors and an overall decrease in Chinese Imports, Dry bulk shipping is inevitably also experiencing a deep collapse.
Reduced container exports from China due to the industrial sector slowdown, are in fact also expected with Major carriers being hit directly.
As also reported by CNN, more than 5,300 persons are being quarantined on two cruise ships off Hong Kong and Japan due to concerns of passengers and crew being exposed to the virus. The ‘Diamond Princess’ and the ‘World Dream’ are in fact both quarantined near the coast of Yokohoma and at Hong Kong’s Terminal respectively.
“Apart from the obvious danger to crew members of contracting the illness at a port in an infected area, port authorities may institute reporting and quarantine measures to guard against the spread of the disease from vessels that have previously called at infected ports and in the most severe cases of outbreak ports may be closed altogether” Rohan Bray, the CEO of Steamship Mutual of Hong Kong insurance Branch said, Marinelink published.