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Report: A Return to Normal Container Trade in April is Optimistic

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The coronavirus outbreak is expected to have a longer and larger impact on imports at major U.S. retail container ports than previously believed, as factory shutdowns and travel restrictions in China continue to affect production.

That’s according to the Global Port Tracker report released by the National Retail Federation and Hackett Associates, which says that an expected return to normalcy in March or April was an optimistic view.

“There are still a lot of unknowns to fully determine the impact of the coronavirus on the supply chain,” said NRF spokesman Jonathan Gold. “As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. Retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption.”

The NRF’s survey of members found 40 percent of respondents said they are seeing disruptions to their supply chains, and another 26 percent expect to see disruptions as the situation continues.

Port Numbers Down

U.S. ports covered by Global Port Tracker handled 1.82 million TEUs in January, the latest month for which after-the-fact numbers are available. That was up 5.7 percent from December but down 3.8 percent from unusually high numbers a year ago related to U.S. tariffs on goods from China.

February was estimated at 1.42 million TEUs, slightly above the 1.41 million TEUs expected a month ago but down 12.6 percent from last year and significantly lower than the 1.54 million TEUs forecast before the coronavirus began to have an effect on imports. March is forecast at 1.32 million TEUs, down 18.3 percent from last year and less than the 1.46 million TEUs expected last month or the 1.7 million TEUs forecast before the virus.

April, which had not previously been expected to be affected, is now forecast at 1.68 million TEUs, down 3.5 percent from last year and lower than the 1.82 million TEUs forecast last month.

The analysis indicates imports could jump to 2.02 million TEUs in May, a 9.3 percent increase year-over-year, on the assumption that Chinese factories will have resumed most production by then and will be trying to make up for lower volume earlier. June is forecast at 1.97 million TEUs, up 9.6 percent year-over-year, and July is forecast at 2.03 million TEUs, up 3.3 percent year-over-year.

Imports during 2019 totaled 21.6 million TEUs, a 0.8 percent decrease from 2018 amid the ongoing trade war but still the second-highest year on record. The first half of 2020 is forecast to total 10.23 million TEUs, down 2.8 percent from the same period last year and below the 10.47 million TEUs forecast a month ago.

Trump Announces Further Restrictions

Further action to curb the spread of coronavirus to the U.S. has been announced, with President Donald Trump issuing a proclamation to restrict travel to America from foreign nationals who have recently been in certain European countries. The restriction applies to those who have been in the Schengen Area, 26 countries in Europe with open-borders agreements, in the last 14 days. It is also to apply to trade from those nations, although no details have been specified yet. It does not include the U.K.

The Trump Administration declared a public health emergency in January to bolster response efforts. That month, the President restricted travel from foreign nationals arriving from China, and in February, he extended the restrictions to include Iran.

A Call to Stop Discrimination

On March 4, Beyond Shipping and New York Shipping Exchange, along with multiple shipping companies, issued a statement calling for goods from China to be treated without discrimination.

It states: “On January 31, China’s Ministry of Transport released an emergency notice that port enterprises should take scientific and rational steps to arrange production and operations. It is strictly prohibited to prevent cargo ships from berthing or keep them in anchorage for 14 days in the name of epidemic control. Meanwhile, some Port of States have also raised requirements for inspection and quarantine to prevent the spread of the epidemic.

“However, it has been rumoured that vessels which have been to China in the last 15 days would be denied to offload cargo, even if there are no suspected cases or sick crew onboard. Similar news worried many small shipping companies, shippers and freight forwarders. Some people are in a panic and cannot judge the truth. In fact, the United States is not rejecting shipments from China.”

The companies, which include COSCO Shipping Lines, Sinotrans Container Lines, CMA CGM(China), Guangzhou Port Group, Worldex Group, Worldwide Logistics Group, Neptune Supply Chain Technology Limited, state:

  1. Shippers and freight forwarders shall not reject goods from China.

According to the statement from World Health Organization and National Center for Humanization and Respiratory Diseases of the United States, coronaviruses do not survive long on objects. The risk of spreading virus by products or packages which have travelled at sea for several days is very low. Therefore, goods exporting from China could not carry virus. It suggests that shippers and freight forwarders shall not reject goods from China.

  1. Shippers and freight forwarders shall not worry too much about the health of shipping companies’ employees and crews.

Many shipping companies have issued health and safety guidelines and epidemic prevention supplies to Chinese employees, informing them to take necessary precautionary measures. Shipping companies have also established an emergency report system to make every effort to ensure the safety and health of employees, while not allowing any sick crews on board. Shippers and freight forwarders do not need to worry too much about the health of employees and crews. Otherwise, goods will not be affected either.

  1. Please do not believe rumours and overreact.

Shipping companies continue to operate uninterrupted as per usual. If there is any operational adjustments for the sake of epidemic control, it’s believed that shipping companies will notify shippers and freight forwarder timely. Please do not believe rumours and overreact

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