Maersk, a global transportation giant,
decided to suspend the replacement of the crews working on container vessels in
operation for 4 weeks. With the global spread of COVID-19 virus, there is even
a case in which products shipped by Maersk were rejected at a port.
Maersk stated in an email that due to the
sudden shutdown of borders and airline services caused by the COVID-19 virus,
the replacement of workers in container vessels is from March 17 to April 14.
The decision was made based on the company’s guarantee of crew safety and the
need for the company to continue the business service as much as possible. Maersk
also mentioned in the email that it is essential to ensure the safety of its workers.
In terms of the current situation, suspending the replacement of crews can
reduce the extent of their social interaction. In addition, global travelling
may strand the crew in a place where they are unable to go back their countries
or where they are unable to be assisted.
Maersk also said in the email that Maersk
will be keeping contact with all related authorities and organizations and will
solve the problem according to the laws and regulations to make sure that their
shipping crew will keep forward safely.
According to the data from Alphaliner, so
far Maersk has been operating 694 container vessels, including 314 self-owned
vessels and 380 vessels that are rented from other companies, with
appropriately 4.16 million TEU of transportation capability. There are
thousands of workers working on these container vessels.
Worldwide
container shipment to be hit hard by virus
In early February a report mentioned that
Maersk suffered serious loss from the COVID-19 virus. An analysis from Sea-Intelligence
showed that container shipping lines could lose around USD 1.7 billion in
revenue due to the coronavirus outbreak. This would have dire consequences for
ports and terminals.
With the early outbreak of the coronavirus
in Asian countries, many shipping companies canceled numerous flights to Asia.
From the fifth week to the fourteenth week after the outbreak, shipping
companies canceled around 1.7 TUE of transportation capability, which equals 1
percent of the total transportation capability in the whole year of 2019. In
other words, in 2020, the production of new containers around the world will
decrease by one percent.
Business
of CMA CGM and Hapag-Lloyd also expected to suffer
Among the three major European container
lines covered by credit rating agency Moody’s, Maersk is hit the hardest by the
coronavirus. But CMA CGM and Hapag-Lloyd are also impacted by the outbreak.
Moody’s also mentioned that in terms of individual carriers, Maersk will exert
the biggest impact. This is because 30% of the total cargo of Maersk in terms
of shipping, ports and tugboat business comes from China.
In addition, Moody’s changed the evaluation
result of CMA CGM from “stable” to “negative” earlier in February. Since the
acquisition of Ceva last year, CMA CGM has been reviewed and evaluated even
more strictly, because the acquisition has led to high debt.
As for Hapag-Lloyd, Moody’s mentioned that
shipping business that is related to China in 2019 accounts for 25% of the
company’s total income. The first quarter did show a decrease in the volume of
goods transported, but it is difficult to forecast whether the company’s credit
quality will deteriorate due to the strong performance of Hapag-Lloyd’s liquidity
and balance sheet.
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