It’s been a journey full of wonders. Wonders brought by the pandemic COVID-19 have given liner shipping a tempestuous -roller-coaster ride in the year 2020. While we were still expecting the changes and impacts caused by the extended trade war and the enforced low-sulfur fuel oil regulations early in the year, coronavirus suddenly burst and spread wildly and globally. All preventive measures against COVID-19, such as city lockdowns and remote working, have interrupted production lines, decelerated trade activities, and hindered not only the supply chain but the global economy.
With the market plunge in the first half, who, at the time of the pandemic’s outbreak, could expect that there would be such a surprising upturn in the second half which led to shortage of containers, tight vessel slots, lack of laborers, and even port congestion, and eventually an opportunity for lines to compensate for the losses in their first half?
COVID-19 has widely changed our lifestyles and gradually transformed business models as well as operating strategy. Reportedly, the present heating demands may last to Q1 of 2021 at least, and the vaccines should be ready for launching when clinical trials are passed. It’s still too early to say that the pandemic will be completely eradicated. As long as COVID-19 is prolonged, its influence and interruption to the economy growth will endure.
Surging freight rates are seemingly a windfall for liner shipping, but cost hikes will inevitably accompany them. The skyrocketing ships’ charter hires, tied with longer contract periods as well as sharply increased rental and newbuilding price for containers, along with other increasing operating costs, will no doubt be heavier burdens for lines, particularly when demands fade as time goes by.