Cargo transportation industry is facing difficulties caused by the COVID-19 pandemic. Over 90% of the total worth of trade between Europe and China is performed by the sea and air transport, however presently the cargo transportation volumes in these sectors are declining. In the sea transportation market, it resulted in cutting 20% trans-Pacific capacity to prevent further decline of carriage rates. In May, a total of 25 to 30% sailings in Asia and Europe will be cancelled.
Apart from blank sailing, carriers optimize their operation costs through changing delivery routes, by offering consignors to opt for other delivery terminals or intentionally extending lead times; termination of scrubber installation contracts; using delayed payment for terminal services. The sea transportation industry has an inherent feature of time lag in response to external factors, as the lead times are longer compared with the other modes of transport. Thus, Europe is presently receiving cargoes ordered by European consignees before enactment of the quarantine restrictions. It is possible that the industry will feel the entire impact of the crisis shortly.
