The global economy is groaning under the consequences of the corona pandemic. Global supply chains are disrupted as production has stalled, especially in Chinese factories.
Companies in almost all sectors are exposed to existential needs. Maritime shipping, a key industry, complains about the dramatic drop in cargo volumes around the world. And rightly so: As a result of the Corona crisis, the World Trade Organization (WTO) expects world trade to crash by 13 to 32 percent this year.
Maersk Line container ship off Suez
Freight shipping companies are coming under pressure
These developments are affecting shipping. The decline in the freight business is particularly reflected in the charter rates in the China region. The rates recently dropped to as low as $ 2.000. Before Christmas 2019, they were significantly higher at $ 14.000 to $ 18.000. With such low freight rates, the charter shipowners are unable to cover the costs of ongoing operations. At the same time, transport prices are under massive pressure. The Baltic Dry Index, a measure of freight rates for bulk goods such as grain, coal and iron ore, is at its lowest level in more than four years.
Worries about permanent production downtimes at Chinese companies
One reason for the lower freight rates is the sharply reduced Chinese imports. China, the world's workbench, is producing significantly less because of the company closings caused by the corona virus. As a result, fewer raw materials are required for the production processes. The Chinese New Year, the year of the rat in 2020, may have had an additional impact on the declining production figures. Traditionally, China's imports decrease on the occasion of the New Year celebrations. However, the demand for rust and loading capacities is not increasing to the usual extent.
MSC container ship in Naples
The cruise industry - suffering from the pandemic
The international cruise lines are also affected by the unexpected lockdown. Worldwide, more than 400 cruise ships are either idle or busy bringing crew members back to their home countries. The main German shipping companies affected by the crisis are AIDA Cruises, Hapag Lloyd Cruises, Phoenix Reisen and TUI Cruises. Various websites keep you informed about the Cruise News.
Container shipping companies face massive problems
In particular, container shipping companies face massive problems alongside bulk and cruise lines. Market events hit the Maersk Line hard. The industry leader is just as dependent on Chinese exports as its competitors.
The corona pandemic shows how vulnerable even global companies are to such major crises. For this reason, insurance is a necessity for every profession. Medium-sized and small entrepreneurs are required to deal intensively with possible safeguards under the given circumstances. A professional liability insurance for the self-employed is recommended. Such an insurance covers damage that may arise, for example, from an illness of the entrepreneur. It is essential to find out more about the exclusions of such policies in order to avoid unpleasant surprises later on.