The Impact of Covid-19 on Shipping Companies and Freight Forwarders
At the start of this year, nobody foresaw a global virus outbreak. Everything we believed we knew about the world’s business scene seems very distant from this point of view. Today, we are facing enormous challenges, particularly small business owners and shipping companies. International traffic has been suffering since many containers were put on hold, since the WHO gave out restrictions regarding shipping companies, directly influencing container transport. Governments must bring their focus on supporting people, consumers, and invest all their strengths in stabilizing the local community and inevitably the global business view.
This pandemic has unarguably affected all of us: even big companies, CEOs, customers, banks, freelancers, markets, online shopping platforms, shipping firms- in other words, life as we know it has changed. Health workers represent heroes in this battle against Covid-19, but many worldwide fight every day to bring food to our table and respond to our needs. We mustn’t dismiss their hard work and forget about their sacrifice.
Small Businesses During Corona – Yay or Nay?
With the world’s business scene changing every day, it was clear from the start that some businesses weren’t going to make it. Small businesses are characterized by lower revenue and profit, spatial limitation, smaller work teams, and taxes represent a significant expense for them, meaning that they had to welcome this unexpected situation unprepared. Those mentioned above resulted in many small companies and firms’ disappearance, especially in China and the USA. It is understandable that some of them already experienced difficulties in their work, even before the outbreak.
In response to the current situation, countries like Switzerland, China, and the USA had already realized the dangers of local company disappearances and invested rapidly in supporting small businesses. Freight forwarding and sea freight consolidation have been sprung out very far in dealing with practically unsolvable problems following many disruptions in the mobility of goods held in containers, and the normalization doesn’t seem nearby. On the other hand, specific types of companies seem to respond rather well in this new soil. Cleaning firms, delivery services, grocery and liquor stores, fitness and health companies, mask makers, hobby firms seem to be profiting and expanding their business in these grim conditions.
Corona Impact on the Employees
Before we even knew how resolute Covid-19 is, people expected that quarantine had a limited extent. Some were moreover happy about the free time they spent with their families, working from home, which means a lot in this capitalistic era.
Others were disappointed with this regime because they had already formed working habits and continuous collaborating with their colleagues. For them, Covid-19 meant that teams are being disrupted in their already established way of functioning.
Here is where stocks of platforms like Zoom skyrocketed. Workers must be able to communicate efficiently and in regular terms, which designed the improved order of online communication platforms.
In terms of mental health, reports are different, varying in pressure that individuals experience. Workers in unstable positions, exposed to stress and uncertainty, endure this crisis differently from the rest of the world. Hundreds of Thousands of ship workers have been stuck at sea and encountering numerous problems. But nobody seems to look at them as a priority even though they are still trapped in international waters.
It is becoming apparent that corona will wreck a part of the world market. Some say that we will feel the consequences for a very long time. Panic and irrational reasoning describe how many people responded in these last couple of months.
Fear of hunger, being locked in their homes, and possible lack of necessary supplies drove to the development and expansion of online shopping and trading. Online shopping is widely known for ages, but Covid-19 caused unexpected growth in this area. One reason is the so-called panic buying. Individuals get stressed so that they seek relief and happiness in shopping. Since social distancing became a light motive in the past months, online shopping represents an excellent way to spend your money from the comfort of your couch without risking your health by going to the store.
With the rise in demand and profit for delivery services came problems because China is where the virus originated. With closed borders all over the world, enormous difficulties arose. Shipping companies experienced a lot of challenges, and their employees symbolize modern heroes in this new situation.
Impact on Shipping
The shipping industry found itself in the middle of modern chaos. Countries with lower fairs have thousands of workers trapped at sea, with their contracts expired and far from their families. In addition to that, a wide range of ports is still closed. Freight forwarding has significant profit declines with containers full of merchandise that is awaiting an unclear date of normalization of international traffic.
China is at the top when it comes to trading, and The Shanghai and Yangtze ports are on the impact of measures established by numerous governments. A radical decrease in demand and supply is noticeable when it comes to shipping companies. Logistic companies play a significant role in this matter. In the Asia-Europe sale map, 61 dropped sailings have been stated, resulting in a lavish decrease. All big ports throughout the world had to set rules concerning 14-day quarantine for tankers arriving from or transiting over China. Many harbours have been influenced, including Singapore, Australia, Japan, and Turkey.
With the shipping industry in huge problems, the only way possible for goods to be circulating is air transport. This cognition leads us to realize additional difficulties shipping companies are experiencing. Vital concerns for fright forwarders represent risks related to extreme delays and possible cargo deterioration, which can be fatal.
Expectations and Possible Global Economic Scenarios
There are a few scenarios regarding this matter. The first one points out that, as the virus gets contained globally – the poverty jump will be present in developing countries. High-income countries will be able to recover in a relatively short period. The second scenario envisions the virus’s containment in high-income countries and a partial containment in other countries, possible periodic outbreaks with a potential economic crisis. And the third scenario is pessimistic in terms of containing the virus and the global commercial scene, meaning extremely adverse possible outcomes.
Cargo consolidation represents a simple term. It combines cargo from various shippers into one shipping container. It allows lower rates and is a common way of international trading. Consolidation is essential for freight forwarders because it reduces the costs and lowers the number of tasks. Combining cargo is also known as the freight consolidation industry.
With Covid-19 roaming around, shipping companies aren’t able to deliver their goods. Containers full of consolidated merchandise and workers are stuck at sea. Freight forwarders have been losing both profit and ideas rapidly. They are highly sensitive to this situation because their revenue is moderately low. Management needs to develop new strategies and stay continuous in applying and changing them in terms of dealing with these difficulties successfully. Adaptation is necessary for creating the best scenario possible.