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News Article

Port Activity Lags in Times of Crisis

By Peter Appleby | Wed, 04/08/2020 - 16:06

The lockdown around the world has not meant a suspension of the movement of medicines, products and consumer goods. Now, more than ever, the world’s logistics network must be kept moving to meet the needs of the hundreds of thousands receiving treatment and the billions stuck at home.

Maritime, rail, road and air transportation all have a role to play in this global effort. The world’s maritime transport, which according to Ocean-Insights transports 90 percent of the world’s commodities, has seen an explosion in transport and storage of products from the oil and gas industry. But rail and road transport companies in Mexico have struggled recently, owing to a general reduction in trade and the difficulties faced in moving across borders.

Mexico’s maritime system, which transports goods to and from both its Atlantic and Pacific coasts, has seen a different story. At the end of March, port authorities in Manzanillo, Mexico’s largest port by tons of transported goods, foresaw a decrease in trade of up to 45 percent driven by a paralysis in Chinese trade, the country’s third most important trading partner. Director of API Manzanillo Captain Héctor Mora Gómez told El Noticiero that in March, the port had registered a 30 percent drop in containerized cargo and that figures would “continue to fall, maybe 10 to 15 percent more.”

The maritime industry’s reliance on Chinese-produced goods has been highlighted as the main reason for this. The Asian nation has been dubbed “the world’s factory” and, as the first nation to confront COVID-19, has endured a massive slowdown in economic activity. When the world’s major player takes a knock, the effects ripple across oceans. The CEO of VesselsValue told “China really is the driver of the shipping industry. We are so dependent on Chinese demand and also Chinese exports.”

Mexico’s ports are not alone in seeing a drop in trade. California’s Long Beach port endured a drop-off in handling of more than 50 percent in March and Bloomberg reports that US seaports could see a 20 percent slowdown in April. In March, the port of Rotterdam, Europe’s busiest, experienced a monthly drop of 2 million tons of goods and directors expect that 2020’s total will be “clearly below the 470 million tons of last year.” Germany’s main port, Hamburg Harbor, witnessed a 40 percent reduction in trade as China’s Shenzhen port saw a decrease of between 50 and 75 percent in business. Shanghai, the world’s busiest port, has seen similar disruption.

The recent reopening of Wuhan, the city at the epicenter of the global pandemic, will give port authorities worldwide a reason for hope. Only yesterday, the first buses and trains in 76 days left the city. If the loosening of lockdown measures works, then China’s workforce may be able to work soon and the world’s factory will be back in business. At that point, ports will start to see much needed uptick.

The data used in this article was sourced from:  
El Noticiero, Manzanillo News, Ocean-Insights, T21, Financial Times, DW, Bloomberg, Reuters
Photo by:   Tom Fisk, Pexels
Peter Appleby Peter Appleby Journalist and Industry Analyst