In their latest port study, PortEconomics members Theo Notteboom, Thanos Pallis and Jean-Paul Rodrigue investigate the temporal and spatial sequences of the supply and demand shocks of COVID-19 on container ports and the container shipping industry by comparing these events to the 2008-2009 financial crisis.
Economic shocks test the resilience and adaptability of the shipping industry and container ports. Each crisis triggers different ramifications in the container market. Using operational and financial data from primary and secondary sources, the study, which is published in the acclaimed scholarly Journal Maritime Economics and Logistics (MEL) analyses the short-term impacts and their differences, the reasons for these variations, and the evolution in the adaptive capacity and resilience of ports, terminal operators, and carriers.
The analysis revolves around several inter-related domains: impacts on global supply chains; impacts on operational aspects, market structure, and strategic behavior of shipping lines and terminal operators; impacts on port activity levels in terms of vessel calls and container volumes handled; and network impacts in terms of changes in aspects of container port connectivity.
The changes observed, and the strategic behavior of the market players involved reveal that further, adaptation mechanisms such as slow steaming, economies of scale, and capacity management have been applied differently between the financial crisis and COVID-19, resulting in different outcomes. For an external shock such as COVID-19, impacts are the outcome of how ports and the shipping industry fit within complex supply chains and the cargo composition handled by ports.
Theo Notteboom, Thanos Pallis, Jean-Paul Rodrigue are the authors of the book Port Economics, Policy and Management, to be published in 2021 by Routledge. For an extended preliminary version visit the companion website: www.porteconomicsmanagement.org.