Coronavirus and globalisation: the surprising resilience of container shipping

Coronavirus and globalisation: the surprising resilience of container shipping
Michael Pooler and Thomas Hale 18 Sept 2020

Although the pandemic has brought chaos to the global economy, many lines are making more money

Holding a small axe in a white-gloved hand, South Korea’s first lady Kim Jung-sook cut the ropes tethering the HMM Algeciras and officially launched the world’s biggest container ship at a ceremony in April.

The towering vessel, the first of a dozen ordered by shipping line HMM, is the size of four football pitches. If loaded on to a train, the 23,964 20-foot metal boxes it can carry would stretch for over 90 miles.

Yet for all the pomp on show at the Daewoo shipyard that day, the timing could hardly have been less auspicious. Global lockdowns had by then strangled economic activity in the US and Europe, the biggest markets for Asian exports of manufactured products. And as a result there was a steep drop in traffic of seaborne containers — millions of which criss-cross the oceans supporting global supply chains and transporting everything from electronics and clothing to scrap metal and fresh fruit. By May, nearly 12 per cent of the entire global fleet was idle, according to data from Clarksons Research. Tens of thousands of sailors were stranded at sea.

“The demand shock was even stronger than during the global financial crisis,” says Morten Bo Christiansen, head of strategy at Denmark’s AP Moller-Maersk, the world’s biggest container shipping company. “In every way it has been unprecedented.”

Given such a backdrop, the $180bn-a-year container shipping industry might have been expected to be in a perilous state — especially given its recent record of weak profits and overcapacity. Yet six months after the pandemic brought chaos to the global economy, many of the container lines have navigated the crisis surprisingly well.

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