London (CNN Business)The arteries of global trade are clogging up.
Shipping companies that carry goods from China to the rest of the world say they are reducing the number of seaborne vessels, as measures to stop the spread of the coronavirus crimp demand for their services and threaten to disrupt global supply chains.
About 80% of world goods trade by volume is carried by sea and China is home to seven of the world’s 10 busiest container ports, according to the United Nations Conference on Trade and Development. Nearby Singapore and South Korea each have a mega port too.
«A closure of the world’s manufacturing hub impacts container shipping at large, as it is a vital facilitator of the intra-Asian and global supply chains,» said Peter Sand, chief shipping analyst at BIMCO, an international shipping association. «This will affect many industries and limit demand for containerized goods transport,» Sand told CNN Business.
Everything from cars and machinery to apparel and other consumer staples are shipped in containers, and disruption to the industry could reverberate far beyond China as the country seeks to contain the coronavirus outbreak by keeping factories shut and workers at home.
The longer the health crisis lasts, the harder it will be to move goods around the world. The coronavirus outbreak has killed more than 560 people and infected at least 28,000 — mainly in China, where close to 60 million people are living in cities on lockdown.
Already, carmaker Hyundai (HYMTF) has suspended production at its plants in South Korea because of a disruption to the supply of parts caused by the coronavirus outbreak in China, the company said in a statement.
Floating quarantine
The shutdowns mean that some ships can’t get into Chinese ports, as the loading and discharging of goods slows, said Guy Platten, secretary general of the International Chamber of Shipping, a trade body. Others are stuck in dock, waiting for workers to return to ports so that construction and repairs can be completed, Platten added.
Still more vessels are idling in «floating quarantined zones,» as countries such as Australia refuse to allow ships that have called at Chinese ports to enter their own until the crew has been declared virus-free, added Sand. Platten said he knew of at least one crew that is running low on food because their ship has been idled for so long.
In Singapore, authorities are requiring all vessels that have called at ports in mainland China over the past 14 days to submit a health declaration form. According to port authorities, some shipping companies have taken additional measures, including canceling shore leave for crew, but port operations have not been disrupted.
Giant shipping companies such as Maersk, MSC Mediterranean Shipping, Hapag-Lloyd and CMA-CGM have said that they have reduced the number of vessels on routes connecting China and Hong Kong with India, Canada, the United States and West Africa.