The document discusses the impact of COVID-19 on global shipping and supply chains. It notes that blank sailings reduced excess capacity while keeping freight rates stable in the first half of 2020. Major ports in China, India, and Sri Lanka saw large drops in volumes of 20-50% in the first few months of the year. The challenges for ports include further loss of volumes, less frequent vessel calls, and potential outbreaks on terminals. However, ports may pursue opportunities such as attracting transhipment business, diversifying offerings, and increasing digitization across supply chains.

1. ciltinternational.org1 Covid-19 Best Practice Response
Global Shipping & the Supply Chain
Impact of Trade Volumes on Shipping Lines & Ports in Asia
Romesh David
International Vice President – South Asia
Chartered Institute of Logistics and Transport

2. ciltinternational.org2 Covid-19 Best Practice Response
Impact of COVID-19 on Shipping
• Q1 2020 Production in Far East
• Q2 2020 Production in S. Asia
Demand – US / Europe
• Capacity discipline though blanked sailings
– More than 500 blank sailings
– Kept freight rates at pre-COVID levels with improved
backhaul yield
– Extent of blanked capacity varies by trade lane,
• Transpacific :15%–25%
• Asia–Europe : over 25%
• Asia–East coast & South America : 50%
• Collapse in oil prices – reduced VLSFO differential on
bunkers
Source – Alphaliner

3. ciltinternational.org3 Covid-19 Best Practice Response
Port Volumes - Q1 Comparison
• Top 10 Container Ports - Jan 2017 – Apr 2020 • Ports in China
Source – Alphaliner

4. ciltinternational.org4 Covid-19 Best Practice Response
• During April 2020, Indian major ports registered
a decline of 21.08% while handling 47.42 million
tons (Mt) of traffic.
• Major contributors to this are;
• The Deendayal Port - 8.67 Mt
• Paradip Port - 8.56 Mt
• Visakhapatnam - 5.01 mt
• All major ports declined except
Mormugao (1.56 Mt)
South Asian Ports - India
Source – Indian Infrastructure
• The ports with major declines are;
• Chennai (38.17%),
• Jawaharlal Nehru Port Trust (33.97%)
• Cochin (33.73%)
• Kamarajar (30.03%)
• Kolkata (26.49%)
• Commodities with highest share;
• Petroleum, Oil, and Lubricants (POL) 34.42%
• Coal at 25.55%
• Containers at 17.52%

5. ciltinternational.org5 Covid-19 Best Practice Response
South Asian ports – Sri Lanka
4%
4%
-5%
-25%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
January February March April
TEUs
2019 2020 YOY Growth
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
0
50
100
150
200
250
300
350
%Drop
VesselArrivals
2019 2020 % drop
Container Throughput Vessel Calls

6. ciltinternational.org6 Covid-19 Best Practice Response
• Loss of volume
• At source/destination – Reduced production followed by demand
• Frequency - Drop in capacity due to blank sailings
• Carriers seeking cost savings – Pressure to reduce overall Port call costs
• Potential for further carrier consolidation - Some lines could falter
• less competitive options for shippers
• strengthened negotiating power for bigger carriers
• Alliances with increased members will change the partnership dynamics for vendors/suppliers/service
providers
• Crew changes, visitor management
• 2nd Wave - Potential for outbreaks in terminals – quarantine
• Heightened competition among ports due to freed up capacity
Ports - Challenges now & ahead

7. ciltinternational.org7 Covid-19 Best Practice Response
• Transhipment Hubs may hurt less
– Optimal utilization of Ultra-large Ships a key driver for Lines
– Network redesign could signal greater shift to traditional Hub & Spoke Model
– Resultant increase in feeder volume and frequency along spokes
• Diversifying product offering
– Use capacity for lower yield products – DIT - Advance hubs in support of near and alternate sourcing options – smaller inventories
along the supply chain routes as contingencies
– Inspection/survey services
– Empty pools
• Sourcing Risk mitigation - likely to drive shift in trade patterns - may present new services for regional ports
– E.g. Indonesia/India rising as a strong alternate/supplementary sourcing locations to China & Vietnam
– Likely growth in inter ASEAN+ and SAARC regions
• Greater Digitization of current paper laden work practices
• Digitalization across the supply chain through common platforms like TradeLens - driving industry wide service
& cost efficiencies (DCSA)
• Non Traditional Business – Specialist Safe Crew Change Hubs
Ports – Opportunities Ahead

8. ciltinternational.org8 Covid-19 Best Practice Response
Thank You
LinkedIn: https://www.linkedin.com/in/romesh-david-1942058
Email: Romesh.David@sagt.com.lk
Romesh David
International Vice President – South Asia
Chartered Institute of Logistics and Transport