2020 in Review: How Did the Pandemic Impact Maritime Logistics?

in Updates, Maritime Knowledge by

The COVID-19 pandemic has had an unparalleled impact on global mobility – on land, at sea and in the air. The severe restrictions on human movements, changes in consumption and the economic impact of lockdowns and reduced demand due to increased unemployment or short-time working hit the global economy hard, though with greatly differing impacts on national economies. So how has the pandemic affected maritime logistics?

Port congestion, Port of Los Angeles, May 2021, FleetMon Explorer

Global trends in 2020

According to a report published by IHS Markit, in a year-on-year comparison global GDP fell by 4.2%, industrial production by around 5% and seaborne trade by 9.5% in volume terms. In H1/2020, the year-on-year decline in global trade was an unparalleled 16%. The partial recovery in H2/2020 ameliorated the annual decline before the surge in COVID-19 infections and fatalities in the Northern Hemisphere’s winter brought a renewed decline.

Containerized trade remained relatively stable. This was mainly due to the fact that China accounts for a high proportion of global containerized traffic and the Chinese economy quickly recovered from the pandemic-induced downturn. For the year as a whole, China’s GDP grew by 2.03%, the world’s only major economy not to have shrunk. The number of container vessel port callings in China fell by 16% in February 2020 but soon recovered to normal levels. Consequently, the numbers of container vessel port callings in the top ten countries stayed close to the 25,000 mark throughout 2020. The only exception was December 2020 when the number fell to little over 15,000, a reflection no doubt of the lockdowns re-imposed in many Northern Hemisphere countries.

The most important factor affecting the tanker industry in 2020 was the steep fall in oil prices to as little as US$29 per barrel due to the unprecedented global slump in economic activity. More and more tankers were used as floating storage vessels, a trend that peaked in June-July 2020. Another significant trend from Q2/2020 onwards was the significant increase in the number of tankers anchored globally compared to the three-year average (2017-19). This was also due to increasing levels of congestion outside key ports.

Hardly surprisingly, the cruise industry was hit hardest by what amounted to a pandemic-induced ban on travel in 2020. The number of port callings fell dramatically in a year-on year comparison and has yet to show any signs of recovery in 2021.

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Ship movements in selected waters

Ship-based mobility patterns are monitored globally on the basis of AIS data, which reveal cargo ship and tanker activity in globally important waters. Off the Chinese coast cargo ship movements in 2020 confirmed the fast recovery of the Chinese economy as they exceeded 2019 levels from May 2020 onwards. Tanker movements were also somewhat higher in spring and summer 2020 before returning to 2019 levels in the autumn.

FleetMon’s Analysis on Global Vessel Traffic 2020

Figures for the Strait of Hormuz, a key passage for oil tankers, reflected the global decline in the demand for oil in H1/2020 but increased significantly in H2/20 in a year-on-year comparison. A similar surge in H2/2020 is evident in cargo ship movements through the Strait of Hormuz, which ties in with the upturn in numerous major economies in H2/2020. On Atlantic Ocean North routes cargo ship movements remained below 2019 levels throughout 2020 whereas tanker movements recovered from the H1/20 decline to more or less reach 2019 levels in H2/2020.

Pacific Ocean figures are revealing. Tanker movements showed no significant diversions from 2019 figures, with the exception of a sudden spike in December 2020. Cargo ship movements, however, were largely well below 2019 levels in H1/2020 but surged above them in Q4/2020. This was a reflection of the buying boom in the US and a massive surge in demand for goods from Asia’s manufacturing hubs, and China in particular.

The impact of the booming demand for Asian imports is also seen in the figures for the Port of Los Angeles where cargo ship activity rose to well above 2019 levels from September 2020 onwards. The most obvious ongoing evidence of this surge in cargo ship activity can be seen in the waters off LA: On March 10, 2021, for example, 48 fully laden containerships were anchored in San Pedro Bay and the average waiting time for docking had risen to seven days.

Port congestion, Port of Los Angeles, May 2021, FleetMon Explorer

Good news

At a time where good news is hard to come by, it is encouraging to report that shipping’s CO2 emissions fell by around 1% in 2020 due to the impact of the pandemic. According to data compiled by Marine Benchmark, a Swedish data analytics firm, containership emissions were down by 2.4% and cruise ships by a massive 45%. However, this decline was largely offset by increased emissions from tankers and bulk carriers. After all, anchored tankers also have to keep their engines running. As Torbjorn Rydbergh, Marine Benchmark’s CEO points out, “the pandemic has had a varied effect on shipping, with tankers and bulkers generally performing well, while other sectors faced headwinds as consumer demand plummeted.” However, it is clear that this slight decline is likely to be reversed as soon as the world economy recovers from the pandemic.

Nevertheless, one other piece of good news shows shipping is thinking in the right direction. On April 21 the BBC reported the shipping industry’s call for a new global carbon tax to combat climate change. The initiative came from the International Chamber of Shipping and was backed by BIMCO, the shipowners’ association, the Cruise Lines International Association and the World Shipping Council. This call for action is most definitely a step in the right direction for the post-corona future of the world economy and global shipping.