A return to pre-pandemic levels of consumer goods travelling on container vessels internationally is unlikely this year, analysts have said.
Although social distancing measures are starting to ease across Europe – with the UK set to allow non-essential shops to re-open in June – lower consumer spending is likely to persist as economies grapple with the long-term impact of the pandemic.
As a result of this, there is little chance of a rebound in demand for container shipping in 2020, said shipping analysts on a webinar yesterday (26 May) titled ‘Adapting to the ‘New’ New Normal: The Impact of COVID 19’.
No sudden bounce
Peter Sand, chief analyst at international shipping association BIMCO, and Lars Jensen, founder of maritime data and analysis company Sea-Intelligence, were speaking on the webinar organised by shipping events company TOC Worldwide Digital and reported on by Loadstar.
Sand said he has not seen a “sudden bounce in demand” since lockdowns started to ease.
“Sales of containerised consumer goods have been some of the hardest-hit by lockdown measures, and lower consumer spending power is likely to persist for a prolonged period,” he said.
Lars Jensen, the founder of maritime data and analysis company Sea-Intelligence, speaking on the same webinar, said that any rebound would depend on three factors:
- The virus being eliminated
- Consumers starting to spend again
- Whether both the above coincide with a peak period such as Christmas
He said, “we are shortly entering the peak season, which is when retailers stock up for Christmas – but is any retailer seriously predicting strong Christmas sales this year?”
Alan Murphy, CEO of Sea-Intelligence, said there has been a small increase in demand over the last two weeks, saying some carriers are seeing sufficient demand to ‘un-blank’ some sailings.
In Sea-Intelligence’s latest ‘Sunday Spotlight’ analysis, reported on in Lloyds Loading List, Murphy said “the total number of blank sailings has plateaued for a few weeks now” but in the past week “a few sailings have been re-instated as carriers see sufficient demand to warrant ‘un-blanking’ these sailings”.
However, he says this should not be construed as a strong “rebound in demand” but should be understood as carriers avoiding rate declines by better utilising space on vessels.
Flexport define a ‘blank sailing’ as a “sailing that has been cancelled by the carrier” missing either one port or the string of ports it had been due to dock in. They occur when demand for space on the carrier is low.