Some analysts have said that April has been the worst month of economic impact for the Coronavirus but are optimistic it will improve going forward.
A.P. Moeller-Maersk, a shipping line that controls almost 20% of the world’s ocean container market, expects volume to fall by 25% or more this quarter.
Maersk posted a slight profit in Q1. They were able to salvage profits by cancelling sailings and raising freight rates about 5%. In total, they cancelled 90 sailings in Q1 and expect to cancel another 140 sailings.
There is a valuable lesson in this news and that is that when times are tough in the ocean shipping world, the large ocean carriers of the world will find a way to pass on the economic damages to their clients by raising prices and reducing capacity. In the process, shippers are expected to either adjust their prices or pass on this added cost to the consumer.
Meanwhile, several shipments can be delayed multiple weeks as companies like Maersk will wait to fill the ship for it to leave. If you are unfortunate enough, your booking will be rolled over another week as the ocean carrier overbooked the ship on the route they haven’t sailed out from in 3-4 weeks.
That being said I have tremendous respect for what the Ocean Carrier’s do, but it is tough to have compassion when profits take an overwhelming front seat to providing a reliable service.