Shipping Companies: Determining the Impact of COVID-19

• Apr 16- 2020
• Flatbed Logistics

The effects of coronavirus on the global shipping industry could last for many weeks or even several months. The last time something so big affected the shipping sector was during the Great Recession of 2008-2009. Even though there are different reasons, the impact on flatbed shipping companies has been much the same.

The COVID-19 outbreak has triggered shutdowns of many businesses. That caused markets to crash. It also highlighted companies whose supply chains have suffered because of the crisis.

How the Virus Affects Shipping

In the first couple of months of 2020, many Chinese factories have slowed production or stopped their operations. That caused the cancelation of many cargo shipments. Many shipping containers are now sitting empty in the ports in North America and Europe. The 2008-2009 recession caused a similar decrease in customer demand.

At the peak of the Great Recession, about 11.7 percent of cargo ships in the world sat idle. At the end of February 2020, about 8.8 percent of cargo ships were idle.

Negative Impact on Cargo Transportation

During the Great Recession, the effect on shipping lasted more than a year. Right now, the effects of the coronavirus are being felt by industry players in the last few months. There is some disagreement among experts on when shipping providers such as flatbed transportation companies will go back to normal operations.

Once the Chinese factories are back to full capacity, it is likely that the industry can see a slow return to normal. However, that will depend on how many shipping containers are ready for use. The shipping containers are currently sitting at ports in Europe and North America, and they need to go back to China.

Producing Goods

Many manufacturing companies are deciding on whether or not to operate at full capacity. Some of these companies are using up their inventories and must get new supply. However, some manufacturers, such as the ones in South Korea and Japan, are slowing down because they do not have the key parts they need for production. While manufacturers may stay at full production for a few more weeks, it is likely they will begin to slow down, negatively affecting flatbed transportation companies.

The length of time that the slowdown lasts will determine whether or not it mirrors what happened in 2008. Some experts have suggested that people will still feel these effects next year.

Work with a Top Logistics Coordinator

The effects of COVID-19 on the shipping industry may last for several weeks or even months. But that should not stop your company from continuing to use the flatbed trucking services that MGA International Logistics provides. Contact us today to learn why we are one of the best logistics companies.