Trade tensions between the U.S. and China had depressed demand throughout 2019. On a longer time frame, a trend to near shoring or on shoring and the rise of automation were both creating headwinds for the unfettered growth of globalization on which the global shipping industry depends.

Indeed, the industry has benefited from an almost unbroken run of increasing seaborne container freight volumes over the last four decades, a recent Financial Times article reports.
The coronavirus pandemic, though, has been far worse in terms of volume of demand, albeit for a shorter time period.

Trade volumes dropped dramatically as the pandemic spread, one measure of that being transits through the Suez Canal, a crucial shipping route for the Asia-European trade. Container ship transits were down 15% year on year, faltering continuously since January, International Shipping News reports, and were down by 32% year on year in May to settle at an all-time low by the beginning of this month.

As a result of firms’ nimble response to the pandemic, the Financial Times reports the Shanghai Containerized Freight Index, which tracks the freight rates that container shipping lines charge
everyone, from the world’s biggest retailers like Walmart to global manufacturers such as Volkswagen, has fallen in 2020 but remains higher than a year ago (as anyone moving cargoes during this period will attest).

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