5 Ways COVID-19 is Impacting the Shipping Industry

Posted by Benjamin Meskin on Feb 7, 2022 10:11:00 AM
Benjamin Meskin

Now that we’re two years into the COVID-19 pandemic, we can examine the long-tail effects of this on the shipment industry. This article was formulated to examine the impact of COVID-19 on the shipping industry. Read on to find out exactly how the industry has been affected and how you can proactively overcome these hurdles.

It all started when the outbreak of the virus led to the shipping industry facing real existential threats. First, commercial vessels stopped arriving at ports, causing total revenues to massively fall. Subsequently, other ships were idled, or were eventually delayed by increased disease containment measures!

This led to delays across the world, ending up in everything from empty supermarket shelves to delayed shipments worldwide. It’s been a topsy-turvy two years since COVID-19 impacted the world in January 2020. It’s unsurprising given that shipping accounts for around 90% of global trade. There have been countless ways covid-19 has impacted the shipping industry.

While we do not know how long the pandemic will continue, exporters can respond to continued delays with the help of eCommerce shipping solutions. It’s never too late to take action and as an international shipping insurance company, we are here to help our industry partners. Read on to find out how!

1. Delays and Canceled Shipments

At the outbreak of the COVID-19 pandemic, there were a series of events that rocked the shipping industry. When manufacturing facilities closed, import containers accumulated and congested harbors in China and across the world. Next, demand for products in China and beyond dropped which led to shipping lines losing revenue and cargo.

This had an effect on North American and European trade, leading to a rise in trade costs because of capacity shortfalls and increased indled vessels. Now, sources say that 75% of American companies experienced supply chain disruptions.

In order to mitigate risk, we recommend that shipping companies create comprehensive guidelines to minimize risk of infection of their staff. Basically, we don’t want to cause more delays than there already have been! When there are cases of infection, there should be steps in place to detect, isolate, and minimize any subsequent disruption occurring.


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2. Significant Revenue Losses

Unsurprisingly, carriers have faced over $2 billion in revenue losses globally due to ‘blank sailings’ (sailings that have been canceled by the carrier). Look at 2020, when global trade decreased by 4.1% due to the pandemic.

Why did this happen? Partially because carriers (usually) change shipping schedules 2-3 times during transit. While these changes usually don’t present problems, during the COVID outbreak, exporters couldn’t actually keep track of their containers and revenue went down up to 5%.

This is why eCommerce shipping solutions are absolutely key towards risk mitigation in a still-affected shipping industry. As an example, Cabrella shipping insurance technology provides an overview of the truly dependable carriers in specific regions. Plus, you can view instant alerts about elevated risk areas.

You can also view port performance data to prepare ahead of time through dynamic shipping. Users can even automatically compare carrier schedules and vessel positions to proactively avoid risk. Not a bad way to have your eyes on the game and control your shipping from a singular dashboard.

3. Changing Consumer Purchasing Behavior

We all remember back in 2020 when the world seemed more or less upside-down. Consumer habits shifted massively and people began spending more on essential home items, and less on novelty items such as clothes and auto supplies.

Car manufacturers reduced production volume. Facilities were closed due to lack of demand or government restriction. Manufacturers faced issues with obtaining components due to supply chain disruptions.

All of this could be mitigated with simple freight insurance. This is perfect if your business is ever impacted by COVID-19 restrictions or supply chain issues moving forward. How? You will avoid and potentially overcome carrier liability issues because your goods will be trackable.

To file claims, you merely go online and file through a user-friendly platform like Cabrella. This way you can integrate your cargo shipping and transportation management software to further reduce your risk profile!

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4. New Protective Measures and Restrictions

Yes, rules and regulations have been an endless hassle from everyone from international shipment companies to families who need to fly home to visit family.

Thus, the International Chamber of Shipping has noted a list of regulations and guidelines to abide by. Governments have introduced the following international shipping restrictions such as:

  • Delayed port clearance
  • Prevention of crew (or passengers where applicable) from embarking or disembarking (preventing shore leave and crew changes)
  • Prevention of discharging or loading of cargo or stores, or taking on fuel, water, food and supplies
  • Imposition of quarantine or refusal of port entry to ships (in extreme cases)

5. Cargo Congestion at Ports

Cargo congestion has also been caused by labor shortages that were caused by city or national lockdowns. In China, most workers have returned to their cargo ports, there are still occasional sudden lockdowns that pop up with no warning!

Longer waiting times (typically caused by port shutdowns) both mean that cargo needs to be packed accordingly. We recommend that you follow a shipping and packaging checklist to truly ensure that your shipment will arrive undamaged at its destination.

Moving Forward: Here's What You Can Do

Nobody knows when this will all be over. Many thought the pandemic was fading, until Omicron led to restrictions popping up across the planet.

For much of the world, there is significant uncertainty about how the pandemic will unfold. One thing that every exporter, shipper, and carrier should do is be prepared for the worst-case scenario.

That’s why we’re here to help. Technology is a crucial component for minimizing supply chain disruptions! Let’s illustrate and use predictive estimated arrival times as an example. These can help shippers to determine the best shipping strategies. Meanwhile, live shipment tracking can ensure consumers, retailers, and manufacturers to communicate shipping updates in an accurate manner.

We recommend reducing disruptions across your supply chain with proactive measures such as adding intelligent shipping insurance technology to your roster.

Learn more about how the shipping industry is impacted by COVID-19 from the experts at Cabrella by calling us at 844-415-1431. Our licensed experts are here to help.

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