Maritime trade will contract by 1 billion tonnes in 2020: Clarksons

In a semi-annual assessment of the impact of the pandemic on the shipping industry, Steve Gordon, Managing Director of Clarksons Research, said: “The severity of the economic ‘shock’ of Covid-19 on the shipping industry becomes clearer: we estimate that maritime trade fell by 10.6% year-on-year in May and our annual projections suggest that trade will contract by 5.6% in 2020, representing 1 billion tonnes of trade ” lost” and the biggest drop in more than 35 years”.

In a sign that the industry has passed the peak of impact, the daily call activity index at global ports fell 7.4% in June year-on-year, from 9.9% year-on-year in May. Gordon noted that port activity in China has normalized.

“Our range of recovery scenarios illustrates that huge multi-year risks remain and signal a difficult and ‘bumpy’ continued road, but also the potential for further examples of upside disruptions: perhaps ‘windows’ of improvement rates as markets face inefficiencies and large swings in demand from month to month.

The shipbuilding sector has seen a 20% drop in deliveries year over year, but is now seeing an improvement in productivity.

“We have also updated our comparison with the situation during the financial crisis: a potentially much deeper initial impact but a sharper rebound; a smaller newbuild order book (10% of the fleet and not 50%); weaker business growth before the disruption; better capitalized banks; different megatrends. Our best wishes to our friends and followers as they deal with the Covid-19 outbreak,” Gordon said.