Editorial: 2020 shipping news getting grimmer

As that familiar flashing road sign warns: expect delays ahead.

That’s the forecast for global goods movement as the COVID-19 pandemic’s first wave gives way to gradual economic reopenings in B.C. and elsewhere across North America.

The goods flow into the province during 2020’s first half has been relatively smooth.

But the longer-term fallout from trade and manufacturing shutdowns that began in March and involved roughly half the world’s population will really start to be felt in the West in the year’s second and third quarters.

Disruption in people movement was immediate; disruption in goods movement is traditionally a month or so behind marketplace events.

The outlook from some shipping industry analysts is for a second-quarter drop of 16% in global port throughput.

That is significant by any measure.

Even though manufacturing in China has increased, demand for products in North America and other major consumer markets has not.

For ocean container carriers that means less cargo, less revenue and more cancelled sailings and other emergency cost-cutting measures. That also means less capacity and more cargo delays.

Atop that supply-and-demand equation are issues unique to the marine supply chain sector. Consider, for example, that the employment contracts for approximately 200,000 international seafarers who crew the massive container cargo ships servicing the transpacific and other key trade loops have expired or are about to expire, but they cannot return to their home countries in many cases because of pandemic travel restrictions.

The upshot is that if governments do not allow those sailors to be repatriated and the International Transport Workers Federation (ITWF) does not agree to another contract extension, ships will not sail.

That will strand more goods in ports.

The ITWF has said there will be no more extensions to seafarer contracts after June 15.

If there is no resolution to the stranded-sailor issue by then, that expect-delays-ahead sign will be flashing red in North America.