In years past, we would normally see Chinese industrial activity and cargo shipments begin to rebound after the annual slowdown brought on by the Chinese New Year. But as the COVID-19 virus continues to wreak havoc around the world, we are seeing sharp declines in container volume from China. While we anticipated an impact from the virus, we have been surprised by the magnitude of the declines.
Data collected from the FourKites platform points to a steep falloff in shipping activity with February container volume from China dropping 75 percent in January.
The impact of COVID-19 is hitting Shanghai particularly hard. Shanghai is one of the world's busiest ports. It is also close to the Wuhan region, the epicenter of the Coronavirus outbreak. In February, load volume leaving Shanghai had plummeted nearly 78 percent compared to previous months.
As nations around the world battle to contain the spread of COVID-19, the disruption of ocean shipping is being felt on this side of the Pacific, as well. Ports in the US have felt the impact, with ocean-borne imports falling by half in February compared to the previous four months. The impact is reflected in the rapid decline in the absolute load volume of US imports from China, which dropped more than 70 percent in February. This is more evident in the electronics and retail industry, where the imports dropped by close to 85 percent in February.
The coronavirus outbreak is, indeed, a fluid situation. We anticipate further disruption ahead and expect that companies will start sourcing goods from other countries, as well as shift more products to warehouses in domestic markets.
Over the coming weeks, we will continue to share the trends we see emerging from FourKites' platform data.