Digital Edition

July 6 2020

Issue link:

Contents of this Issue


Page 35 of 47

36 The Journal of Commerce | July 6 2020 Special Report Roll-on/Roll-off Shipping: North American Outlook COLD LAYUPS, BLANK sailings, ballast legs, and falling profit margins char- acterized the first half of the 2020 vehicle carrier market, as the effects of the COVID-19 pandemic decimated auto industry demand. In its wake, the pandemic has left ports, carriers, and original equipment manufactur- ers (OEMs) reticent about offering a market outlook for the second half of the year. "We are relieved the downturn is not worse," Scott Cornell, chief oper- ating officer at automotive third-party logistics provider Glovis America, told The Journal of Commerce, adding that in the earlier days of the pandemic, it was frightening to see reports of Chinese vehicle sales falling 80 percent, as they did in March. "Fortunately, the rest of the world never saw that drastic change," he said. "We now see factories starting up and dealer showrooms open. The last piece is the economic effect, as we still see unemployment levels high." Cornell said a stimulus package for automobile sales may still need to come in the third or fourth quarter. "Everything we have in place today, and prior to this happening, we had in place to exceed what we did in the year prior," said Alberto Cabrera, director of cruise and cargo development with the Jacksonville Port Authority ( JAXPORT). "The workforce is still here. The build - ings are still here. The docks are still here, the train tracks, the trucks. I think it all boils down to: Do the US consumers have the confidence to start spending money?" Overcoming the economic effect may prove to be an uphill battle, as the US Federal Reserve released sober unemployment projections on June 10. The Fed predicts the US will end 2020 with a 9.3 percent unemployment rate and a 6.5 percent decline in real GDP. IHS Markit, parent company of The Journal of Commerce, in May pre - dicted baseline global light vehicle sales of 69.4 million units for 2020, a decline of 22 percent from 2019 and the lowest volume since 2010. A more optimistic scenario, reflecting a V-shaped market recovery, predicted 72.5 million global sales units for 2020, down 19 percent from 2019. This scenario, to which IHS Markit assigned a 20 percent probability rate, relies on continued global stimulus measures, including light vehicle scrapping programs, as well as suc - cessful economic reopenings not hindered by a return of the virus. The most pessimistic scenario, to which IHS Markit assigned a 30 percent probability rate, predicted 64.9 million units in global sales. That scenario, predicated on conditions in which the northern hemisphere sees renewed cases of COVID-19 into the third quarter and stimulus measures prove ineffective at containing the crisis, reflects a collapse of more than 27 percent from 2019 volumes. Crisis response In response to the pandemic- induced drop in global volumes, carriers have turned to a variety of tactics to mitigate a sudden glut of Driving winds Ro-ro ports, carriers wait on consumer confidence rebound By Catherine Dorrough 25% 58% 75% -32% -27% -18% -38% -18% 8.7% 2.6% 0 50,000 100,000 150,000 200,000 250,000 Northwest Seaport Alliance Los Angeles Philadelphia Providence Long Beach Port Hueneme NY–NJ Jacksonville Brunswick Baltimor e Jan.–Mar. 2020 Jan.–Mar. 2019 Auto imports growth slows, stalls during first quarter Source: IHS Markit Notes: HS code - 8703 © 2020 IHS Markit Automobile import volumes at top US auto ports, in metric tons, with year-over-year change

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - July 6 2020