The coronavirus health issue will have significant implications for the logistics sector in the short term, with the air transport market expected to feel “the most significant direct effects” of the disease, according to a new analysis from Transport Intelligence (Ti).
The analysis published January 28 said that seemingly, “the most significant direct effects will be felt on the air transport market and especially belly-freight services on passenger flights,” and noted that there are already press reports of a collapse in demand for domestic services in China.
“Presumably, freighter flights will be less affected. In other areas of transport, some barge and low-draft vessel traffic has been slowed into Wuhan’s river-port facilities but this does not appear to be severe yet,” it continued.
The indirect effects are likely to be as important economically. The report pointed to how the price of oil has already fallen and the shares of major container shipping lines have been hit.
“The likelihood is that demand generally will drop in the short-term. The impact on the exposed sectors of shipping and airfreight is obvious. The question is how long will the impact be felt and how deep will any fall in demand and prices be,” said the report.
The coronavirus first emerged in December 2019 in Wuhan in Hubei province, China. Wuhan is a significant hub for road, air but especially rail and river transport. Its position on the Yangtze gives it an important role in handling cargoes from central China in and out of the ports of Shanghai.
The analysis also noted that the virus appears to have mutated to affect humans due to the handling of food and wild animals in close proximity at a food market in Wuhan.
Ti also said that this is not the first time that problems have arisen in the Chinese food supply chain.
“It highlights the importance of food logistics and possibly this might be justification for greater investment in sanitary regulation in the handling and storage of both meat and live animals at warehousing and retail locations,” it said.
Photo by Zhipeng Ya on Unsplash
