PORTS ARE STRUGGLING

The first half of 2020 was much as could be expected in terms of cargo volumes flowing through ports. In our innocence we thought that COVID-19 would be a short-term phenomenon that would quickly end much as it did in China and that the lockdowns would be short followed by a sharp recovery and back to normal.

How wrong we were, while Asia, Australia and New Zealand shut down early and quickly closing borders, Europe blundered forwards with a lack of consistent measures and those put into place were too late and too little. The USA and Brazil took virtually no measures at all.

Trade slowed dramatically in the first half of the year. The second half of the year was a surprise for all as cargo volumes boomed as the infections and deaths rose. Europe finally decided to shut borders, again closing the doors after the horse has bolted.

Fortunately, vaccines are being rolled out. In the West, wave one came to an end by late May 2020 only to return by September 2020 with a vicious second wave that is still with us as governments failed to grasp the required policies, but trade recovered.

This was primarily due to consumers learning how to order on-line with the expectation of same day and next day delivery. This drove up inventory and imports from Asia resulting in unexpected volumes of cargo surging through the ports in Europe and North America.

Shipping space became an expensive commodity and additional ships were brought into service. Space at the ports also became an issue and ultimately empty containers clogged up the system and did not return to Asia.

A great year for carriers with record profits. Economic stimulus packages helped industry and consumers to survive the worst of the crisis as GDP growth rates yo-yoed like a roller coaster.

By the end of the year, however, economies survived, some better than others and the import surge has continued through February 2021 and likely it will be there in March. Economic growth will strengthen in 2021 as will cargo volumes.