IHS Markit economist shares views on state of global ocean cargo industry: Part III

Editor's Note: Paul Bingham, Director of Transportation Freight Consulting at IHS Markit, always provides our readers with remarkable insights on the state of ocean carrier industry. This is the final installment of a  three-part interview.

Logistics Management (LM): The closure of international borders and quarantines of entire countries is something new. What has been the impact on the ocean cargo sector?  

Paul Bingham: Operations of ocean cargo terminals have been little affected, as those were mostly very quickly identified as essential services and where protocols to protect the workforce were adopted rapidly.

LM: Can you provide some examples?

Bingham: There has been some loss of productivity in the terminals and with dray trucking and rail connectivity due to the extra precautions that workers must take.  On the vessel operations side, inherent social distancing and the duration of ocean voyages is sufficient to protect most vessel crews from virus spread if they don’t go ashore and the harbor pilots or new crew members don’t carry the virus aboard in port.

LM: What about the impact on human resources?

Bingham: Apart from the sharp changes in underlying commodity volume demand for ocean shipping, the border closures and quarantines have most affected the mobility of the ocean cargo workforce.

LM: Where do you see the biggest impact?

Bingham: Perhaps the largest impact has been on individual vessel crews now suffering much more difficult working conditions when quarantined on vessels without shore leave and much more difficult crew changes.  So far, unlike with passenger cruise ships, the number of ocean cargo vessels detained or refused port entry has been very small compared with the number of cargo vessels in operation.  Hopefully adopted protocols will allow that to continue, and countries will not shut down ocean cargo terminals or related trucking and rail operations.

LM: Finally, what advice do you have for logistics managers who are seeking to mitigate risk during the disruptive era?

Bingham: Better visibility of shipments becomes more important to be able to minimize disruptions as conditions change country-to-country. Comprehensive country risk management information is available for managers to include in monitoring conditions in relevant markets. IHS Markit provides customers with ongoing monitoring of risk events and developments globally, tailored to managers’ needs across the globe.

LM: So what next?

Bingham: Going forwards, logistics managers will benefit from reassessing their supply chain sourcing and distribution networks, including tier suppliers and key network links and nodes.  Also an understanding of changing conditions affecting customers is valuable to be able to mitigate against risks from changes in demand. Use of supply chain risk modeling for quantification of risk and decision-support at the country, enterprise and supply chain level can help minimize impacts from the disruptions.