Covid-19 has had an impact on the normal functioning of global economies since its inception in Wuhan, China. The shipping industry has not been spared whatsoever and in fact, I would confidently say that it has been affected more than other industries have been. This is because in the previous year, 2019, the World Trade Organization had made a lower forecast for the year 2020 since there were increasing tension and growth in the global economies. With the effect of the 2008 economy crash still fresh in the minds of many business people, the impact that Covid-19 has instigated has seen many businesses in the Shipping industry go under. Sahan Cargo would have taken the hit was it not for the implementation of strategies that allowed for re-invention of its services. In a bid to seek control over the spread of the virus, governments in various countries sought to close down most of its functions and operations, affecting the everyday business operations. Below are the effects that have been experienced in the shipping industry.
The notion of quarantine called for port closure. In a bid to ensure the safety of the citizens who work in the maritime industry, ports were closed to ensure minimal interaction and movement of people. More so, in the process of closing the borders, certain vessels who were in the sea were denied entrance in certain ports, causing chaos in the sea transport. Sahan Cargo had experienced challenges in the number of consignments received. However, with our rich network and expertise, we were able to re-invent our services.
With the closure of businesses, the demand for transportation of goods through the industry drastically reduced. More so, the increased precaution taken by various governments ensured additional standards that the export or import goods should have, reducing the size of products being exported from the producer countries as well as those being imported. The Kenyan government closure on the boarders affected Sahan Cargo in respect to recipient of limited cargo to and from the country.
There are also disruptions in the laytime settlement that has reflected increased charges on the vessel owners due to the waiting period required for the Covid-19 incubation period. More so, the ship owners have been required to include an infectious disease clause, something that has sparked arguments concerning how advantageous it would to them.
Eventually, the financial burden faced by most of the companies in the shipping industry has resulted in some of them being bankrupt. With most of these companies being in the maritime and shipping industry, the dwindling demands in shipping have led to the loss of revenues, and thus, sustaining these businesses has become nonexistent. Sahan Cargo financial structure has provided an advantage to the business from re-invention of the services, helping the business stand the financial pressure associated with Covid-19.