The Likely Impact of Covid-19 on the Shipping Industry
According to a recent report by Lloyd’s List, while Covid-19-related travel restrictions are directly responsible for the decline in shipping so far this year, the decrease is not as bad as what many expected and even points to optimistic signs of a 2021 recovery.
Lloyd’s expects global seaborne trade to equal 11.1 billion tonnes in 2020, a decrease of 3% compared to the year previous, and for the 2020-2024 period it expects annual seaborne trade to average up 2.4% per year. It also projects that by the end of 2021, total GDP will equal that seen at the end of 2019.
The article states that while all shipping sectors will see lower annual volumes in 2020, containerships and general cargo ships will record the largest year-on-year percentage drops (both down by around 3.8% from 2019). In tonnage terms, the liquid bulk market is expected to see the largest drop due to weak crude oil demand.
However, Lloyd’s cites China’s strong imports of raw materials as the reason trade has not fallen as far as anticipated, since the country’s activity rapidly returned to pre-covid levels by June this year.
While intermittent resurging outbreaks are projected to occur across all economies (we’re currently seeing growing cases in countries like the UK, Spain, France, and India), the report forecasts the global “cost” of Covid-19 will equate to two years worth of global GDP growth.
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