Retailers are asking shipping companies to push back deliveries, which may drag global container shipments down as much as 30 percent in the next few months. The reason is warehouses are filling with goods ranging from refrigerators to washing machines.
The International Chamber of Shipping reports shipments have fallen an estimated 15 percent so far this year amid the coronavirus pandemic.
Second-quarter declines, compared with a year ago, will depend on how much governments reopen economies. Inventories of goods such as apparel, textiles, white goods, are full, and receivers of these goods asking shipping lines whether they can store these goods for a period of time or slow their ships down or basically delay taking delivery.
The slump is a setback for shipping giants such as Cosco Shipping Holdings Co. and Ocean Network Express Holdings Ltd., which started the year strong as healthy trade volumes allowed the industry to boost rates. That optimism has now evaporated as the virus outbreak is forcing shoppers to stay home, crimping retail sales in the biggest consumer markets.
Ocean Network Express notes forward bookings for shipments from Asia to North America and Europe have slowed for April and into May. Shipments of products from North and Latin America, Europe and Oceania to Asia are still strong. Ocean Network Express is Japan’s largest container-shipping operator.
In addition to lower volumes, the industry has been hit by restrictions aimed at containing the outbreak. Ensuring that seafarers can board and transfer onto ships amid port curbs and canceled flights remains a major challenge.