China cargo flows rapidly return to pre-coronavirus levels

Finally, some good news about the coronavirus and global supply chains: Cargo volumes and ship calls have swiftly rebounded at Chinese ports, confirming that the cogs of global trade are grinding back into motion. The caveat is that this was to be expected as Chinese port workers and truckers returned after an extended Chinese New Year (CNY) holiday. Inbound and outbound cargo delayed during the post-CNY period was already en route or contracted for transport.

The question ahead — which is pivotal to U.S. transportation companies — is whether volumes will sink back again if there are manufacturing disruptions and reduced demand, or alternatively, whether volumes will increase if China pursues a stimulus program. Following is the latest data on Chinese activity from CargoMetrics, Clarksons Platou Securities and Sea-Intelligence: CargoMetrics Boston-based big-data company CargoMetrics has spent the past decade amassing and analyzing ship-movement data and using quantitative predictive algorithms to gauge global trade.

In February, it released data showing that Chinese imports and exports had fallen sharply compared with levels in 2012-19. CargoMetrics has just released updated indices showing that both import and export cargo flows (measured in terms of the mass transferred on and off ships) have reverted to historical norms. “The bottom for Chinese imports and exports across pretty much all shipping sectors was on Feb.

15,” said Dan Brutlag, Cargometrics’ head of trading signal and data products, in an interview with FreightWaves on Tuesday. On the import side, the decline prior to that date was driven by dry bulk. Since then, he said, “dry bulk has mostly recovered, energy has completely recovered and container imports may be higher than they were before Chinese New Year,” with imports overall recovering “less than a week” after the low was hit.

Chart credit: CargoMetrics

On the export front, Chinese declines through Feb.

15 were driven by the container sector. Since then, cargo categories including containers have rebounded. “The recovery in exports was a little slower to materialize but exports did return to the seasonally expected range by the end of the month [February],” said Brutlag.

China cargo flows rapidly return to pre-coronavirus levelsChart credit: CargoMetrics

He also noted that CargoMetrics is now analyzing the import and export flows of other coronavirus hotspots including South Korea, Italy and Iran. More good news: So far, “we haven’t seen any unusual trends,” he reported.

According to CargoMetrics CEO Scott Borgerson, “We’re seeing improvements across the board. We’re seeing a complete rebound in every segment — it’s all back. We don’t project our views onto the data.

We let the data talk to us. And what this data is saying is ‘keep calm and carry on.’ Supply chains have reverted back to the mean. Things are moving.

So, people should just take a deep breath and they should not get super-excited about what they read on the internet — with the exception of what they read in FreightWaves.” Clarksons Platou Securities “We have begun to see Chinese industrial activity increase after the slowdown brought on by the combined impacts of the Chinese New Year and COVID-19,” said Frode Morkedal, managing director of research at Clarksons Platou Securities, in a client report published on Monday.

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