The arteries of global trade are clogging up.
Shipping companies that carry goods from China to the rest of the world say they are reducing the number of seaborne vessels, as measures to stop the spread of the coronavirus crimp demand for their services and threaten to disrupt global supply chains.
About 80% of world goods trade by volume is carried by sea and China is home to seven of the world’s 10 busiest container ports, according to the United Nations Conference on Trade and Development. Nearby Singapore and South Korea each have a mega port too.
“A closure of the world’s manufacturing hub impacts container shipping at large, as it is a vital facilitator of the intra-Asian and global supply chains,” said Peter Sand, chief shipping analyst at BIMCO, an international shipping association.
“This will affect many industries and limit demand for containerized goods transport,” Sand told CNN Business.
Everything from cars and machinery to apparel and other consumer staples are shipped in containers, and disruption to the industry could reverberate far beyond China as the country seeks to contain the coronavirus outbreak by keeping factories shut and workers at home.
The longer the health crisis lasts, the harder it will be to move goods around the world. The coronavirus outbreak has killed more than 560 people and infected at least 28,000 — mainly in China, where close to 60 million people are living in cities on lockdown.Already, carmaker Hyundai (HYMTF) has suspended production at its plants in South Korea because of a disruption to the supply of parts caused by the coronavirus outbreak in China, the company said in a statement.
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