Effects of the Covid-19 pandemic for the maritime sector

The year 2020 has been undoubtedly marked by the outbreak and rapid expansion of the Sars Cov 2 virus, that causes the Covid-19 disease. Despite the limiting measures taken since the pandemic outbreak of the said virus, its limitation has been a particularly difficult procedure. All sectors of financial activities face a new reality. The financial and corporate environment has changed drastically, and the consequences of the coronavirus pandemic are numerous and complex.

In this difficult situation, the maritime sector could not remain unaffected, thus it has received a considerable setback both in national and international level. This is evident from financial reports drawn up by Hellenic and international organizations which describe not only financial but also further consequences for the maritime sector. The annual report of the Union of Greek Shipowners which has a significant importance, if we take into account that Greek shipowners possess 20.67% of the global capacity and 54.28% of the European Union capacity, is quite interesting. According to the said report, the sudden and global demand downturn caused by Covid-19 has significantly affected fares and income. During the first quarter of 2020, in the dry cargo transport sector, the average decrease of daily income has dropped by 85% for capesize ships and by 40% for Panamax type ships. In addition, apart from ship ownership, Covid-19 consequences have significantly affected activities relevant to the maritime sector such as terminals, ports, cargo handlers etc.

The issue caused in the crew member substitution procedure is also essential. Travel limitations such as international flights’ cancellation and crew change prohibition in many ports across the globe, do not allow maritime companies to proceed to replacing crew members whose contracts have expired.

The limitation of international commerce after the pandemic outbreak significantly affected the circulation of ships thus the maritime sector income. According to the European Maritime Safety Agency (EMSA), the number of ships reaching ports in the European Union from the beginning of the year until December 16th was 473.235 compared to 561.385 during the same period in 2019, registering a 15.7% drop. Once more according to EMSA and for the same period, shipping routes from Europe to China have dropped by 48.6% and from China to Europe by 27.7%.

The report by the ESCAP – Economic and Social Commission for Asia and the Pacific concerning the pandemic consequences to the maritime sector, indicate important data. According to ESCAP, the following are considerable short-term consequences:

  • Maritime trade decrease
  • Delays in customs and clearances
  • Increased ship standby times and delays in crew changes
  • Increase in fares if capacity keeps reducing and the demand / supply ration is mismatched
  • Slower development of ports
  • Acceleration of the digital supply chain via automated systems and creation of “smart” ports

The maritime industry is one of the pillars of the global economy and international commerce, therefore all consequences described herein must be faced as challenges to be solved, until the long-awaited return to normality is achieved.