A mixed picture has emerged of port warehousing and distribution utilisation based on information gathered from 90 ports around the world for the second ‘Covid-19 Port Economic Impact Barometer’.
Some 35% of ports have reported increased utilisation of their facilities in the past week for foodstuffs and medical supplies, while others reported both over- and under-utilisation, depending on cargo type.
Last week these figures were slightly different, according to the report, with more ports reporting a major increase in utilisation levels (10% then vs. 2% this week) and with fewer ports registering a minor under-utilisation (10% then vs. 5% this week).
However, the total mix of ports participating has changed somewhat in terms of composition, so a week-by-week comparison should take this into account,” says International Ports and Harbours (IAPH) managing director Patrick Verhoeven.
The situation for consumer goods has almost remained the same, although there is an increase in the share of ports dealing with major increases in utilisation or facing capacity shortages (11% now vs. 8% last week). In the dry and liquid bulk markets, almost two thirds of the respondents see no changes while the remaining ports are fairly evenly distributed between under-utilisation and increased utilisation of their storage facilities.
At several ports there's been an increase in port and terminal utilisation due to an increase in the imports of essential goods, such as grains (rice, wheat). Stockpiling practices of importers have also emerged and as a result a major increase in capacity utilisation for these deliverables is not uncommon.
Other ports reported strategic storage of liquid bulks by traders in anticipation of future commodity price developments. The most critical situation recorded is for the automotive industry. As dealers fail to collect their new cars (due to a collapse in sales), there's been overcrowding of relevant storage areas near some quaysides.
On the other end of the spectrum, conventional cargo storage has dipped significantly, a phenomenon that was reported before the Covid-19 outbreak. In addition, where strategic storage is not taking place, ports have reported dips in liquid bulk cargo, especially for imported fuels and power generation-related products. This has been either due to low consumer demand (e.g. petrol for cars) or due to a lack of industrial production and mild climate. Similarly ports report fewer or no vessels carrying the usual volumes of cement and sand in bulk due to the halt in construction works.
Co-author of the report, Professor Theo Notteboom, foresees major changes in cargo flows in coming weeks as the impact of blank sailings kicks in. "This will be especially evident in the container shipping sector on the main Asia-Europe and Transpacific trades," he says. “This will cascade into other trade lanes as well, so it’s vitally important for us to view the overall impact on port calls, operations, restrictions, port staffing, hinterland transportation and storage as well as future prospects for international trade to and from ports.”
