Grim worst case scenario for container market

After adopting IMF alternative GDP scenarios, Drewry’s world port handling forecast predicted this worst case situation, the Drewry Container Forecaster for May 2020 shows.

In a webinar explaining Drewry’s findings, Simon Heaney, senior manager, container research and said that economic damage is skewed towards western countries, but most if not all regions will face reduced container volumes.

He said the pandemic has exposed the fragility of the supply chain and that mass idling of vessels, bankruptcy and redundancies could be faced by the container market and the strength of recovery will depend on economic rescue packages and consumer confidence.

A political backlash against China could spur support for a resurgence of the US-China trade war, but there is also likely to be trade diversification regardless.

Sailing cancellations

In a massive industry shock, there has been a 15-20% fall in the number of sailings in March, April and May, said Philip Danas, director and head of Drewry Supply Chain Advisors. 18% of scheduled sailings for May are cancelled but just 13-14% are cancelled for June, signalling a drop in cancelled sailings.

A 250% increase in the number of idle ship since last year, but we are hopefully reaching the maximum for idle fleet, said Mr Damas.