CONTAINER shipping volumes between China
and South Korea have plummeted owing to the coronavirus outbreak that
has prolonged the Lunar New Year factory shut down in China, causing
disruptions to supply chains with sailings cancelled, according to Chung Yang Shipping commercial director H G Jung.
"In terms of container logistics flow,
Incheon port has been the most directly affected," he told London's The
Loadstar. "Import containers entering China from Incheon dropped by
nearly 60 per cent."
Incheon handles three million TEU per annum, but Korea's main port, Busan, handles 21 million TEU.
Mr Jung said import and export cargo at Busan has fallen ten per cent
since the crisis started to unfold, but transshipment cargo had
"flocked" to the hub.
"Busan port normally has a 60-70 per cent container stack ratio, but
it's reached more than 80 per cent due to the coronavirus. They have
secured an alternative storage field in case the situation worsens," Mr
Jung noted.
He claimed the crisis had created the "worst ever" slack season for the shipping industry.
"Four weeks after the Chinese New Year, the whole shipping industry in Korea is heading toward disaster."
The shutdown in China has also had a huge impact on Korea's automotive
manufacturers, which have struggled to keep just-in-time supply chains
flowing.
"This led Korean OEMs to reduce production in February and is highly
likely to affect production in March as well," said one Korean ro-ro
carrier executive.
"This, of course, affects shipping companies like us. In February alone,
the volume is expected to drop approximately 35 per cent from the
initial production forecast," she added.
There were already some automotive plant closures in Korea linked to the
supply chain disruption, and reports claim a Hyundai plant in Ulsan,
close to the outbreak epicentre in Daegu, has halted production due to a
worker testing positive for the virus.
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