How coronavirus is changing global shipping routes | FT Trade Secrets

The pandemic has put intense pressure on the flow of ships from Asia to the west. But FT Trade Secrets writer Thomas Hale says there could also be a far more long-lasting impact on the industry.

It’s hard to imagine anything more central to our globalized world than container shipping just one of these steel boxes carries enough goods to fill your average house the enormous ships that transport them around the world often carry tens of thousands at a time but as with almost everything else about the way the world used to work the coronavirus has thrown

A spanner into the works from the banks of hong kong island you can see plenty of idle ships and behind the scenes the containers they might once have carried are also sitting unused here in one of the world’s most iconic ports that has long symbolized the relationship between east and west this is no coincidence in fact the short term impacts of the coronavirus

On trade in hong kong today might actually tell us something much deeper about the long-term future of the world’s shipping industry at the start of 2020 the coronavirus hit chinese shipping hard fast forward a few months and a flow of ships from asia to the west has come under intense pressure that pressure is falling in particular on the ships that carry goods

To consumers in europe and the us and this is because the ships setting off in the east depend on shops in the west europe italy spain some of these places that have literally shut down completely there’s no opportunity for purchase at a store in the us a lot of the department stores also have been curtailing their their hours so this has been one of the the

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Biggest driving factors the other side is also of course the production has stopped after opening up in the 1970s china has transformed itself into the world’s engine of manufacture but it’s still in the west that much of its production is consumed this arrangement consolidated the east-west shipping routes as the most important artery of world trade and one of

The best indicators of the health of the world economy as the prospect of a deep recession in the west looms over the industry the indications are now clear musk the world’s biggest container shipping company says its east-west trade has been the worst affected part of its business however the fall is not as precipitous as you might expect the importance of the

Container shipping industry to the smooth function of the globalized economy means that for the most part cranes are still operating and ships are still sailing in may around 40 sailings from east asia to the west coast of america were canceled unexpectedly but they could easily come back if the economy recovers the action of pulling ships is not unprecedented

It happens year round and it happens spontaneously whenever a ship the lang finds that they are underutilized they will not hesitate to pull one string or a service or a vessel i think this is probably the first time that we’ve seen such a big drop 12% it’s it’s not huge maybe in our eyes if you think about how much volumes are still moving but 12% is something

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That we have not experienced before cancellations empty containers and idle ships are for now short-term effects of the pandemic it’s the long-distance routes to have suffered worst while the corolla virus has put pressure on consumption in the west there are other longer-term threats to long distance shipping most obviously trade tensions between the us and

China which have escalated over recent weeks look set to outlive the corona virus pandemic beyond that changes to the structure of manufacturing including the rise of automation and the competitiveness of chinese labor markets could also disrupt the flow of ships globally so for ships the size of football fields that travel halfway around the world to bring you

The phone in your hand the pandemic might just prove to be the catalyst for far more significant and long-lasting changes

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How coronavirus is changing global shipping routes | FT Trade Secrets By Financial Times

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