The Shipping Industry Is Still Under Test In The Second Half Of The Year

The flood crisis in the past two months has gradually become stable.

At 14:00 on August 25, the discharge of the Three Gorges reservoir was reduced to 44500 cubic meters per second, reaching the navigation flow standard of the Three Gorges ship lock. About an hour later, "Hongmao 888" slowly drove into the first chamber of the south line of the Three Gorges ship lock. After 174 hours of suspension, the Three Gorges ship lock officially resumed operation. The suspension is the longest since the completion of the Three Gorges reservoir due to flood.

Due to the flood peak passing through the upper reaches of the Yangtze River, according to the instructions of Circular No. 46 issued by the Three Gorges navigation administration, the inflow of the Three Gorges reservoir has reached 57000 cubic meters per second since 8:00 on August 18, 2020, exceeding the maximum navigable flow of the Three Gorges ship lock and ship lift. The navigation of the Three Gorges ship lock and the Three Gorges ship lift will be stopped. When the inflow flow of the Three Gorges reservoir is lower than 57000 cubic meters per second, it will be restored Return to navigation.

This is the fifth time since the Three Gorges ship lock and Three Gorges ship lift have been suspended for the flood season, resulting in more than 100 cargo ships waiting for passage at Fengjie anchorage. At 08:00 on August 20, the fifth flood peak of the Yangtze River in 2020 arrived at the Three Gorges project, with a flow of 75000 cubic meters per second.

"Compared with 2016, this one seems to be in danger, and the flood has not caused much impact on inland river shipping." On August 26, Li Kang, President of Wuhan freight forwarding Association, pointed out in an interview with 21st century economic reporter that the flood peak transit had little impact on the main urban area of Wuhan, and the berthing of Yangluo port, the main port of Wuhan, was not affected.

The impact of flood is limited

In fact, the Yangtze River flood No.5 in 2020 is the biggest flood in the Yangtze River Basin this year.

The Yangtze River will pass through the upper reaches of the Yangtze River at 14:00 on May 20, 2020. Affected by recent heavy rainfall, 62 rivers in the upper reaches of the Yangtze River, Minjiang River, Tuojiang River, Jialing River and other rivers have suffered over alarm floods. The inflow of the Three Gorges Reservoir rose to 75000 cubic meters per second on the same day, which is the largest flood peak of the Three Gorges Project since the establishment of the reservoir in 2003.

In Jiangxi Province, as of August 20, the length of over alarm for the Jiangxi Section of the Yangtze River, Poyang Lake area and other embankments was 390.949 km. From July 8 to August 20, 2075 dangerous cases such as piping, leakage and collapse occurred in Jiangxi Province. Jiangxi Provincial Bureau of hydrology predicts that the daily recession range of Xingzi station, Hukou station and Jiujiang station will be 0.04m-0.06m in the next three days.

Leqi, head of the Logistics Department of Wuhan stock exchange, told the 21st century economic reporter: "the flood situation makes the ships have to wait in line for navigation, but the time requirements for the goods that often choose waterway are not high, so the impact is relatively limited. Most of the customers who are really strict with the delivery time will give priority to highway and railway transportation. "

"The floods in Hubei, Jiangxi and other places are nearly two months this year. The flood situation will indeed lead to the reduction of shipping companies' voyages and the decrease of operating revenue, but this is not the key factor for the decline of shipping companies' performance," Leqi told reporters

At the same time, the continuous flood disaster will not become the main factor to open the gap of shipping development between regions. "Take Henan, Hubei Province as an example. Henan does not rely on rivers and seas, but the number of production vessels is higher than that of Hubei Province. Or the local government's policy guidance to the shipping industry, the industry's financing environment and other reasons occupy a more dominant position. " Loki pointed out.

However, with the deepening of flood control work, inland river shipping has gradually returned to normal state. Previously, the liner "China Airlines Hanya No.1" and "China Airlines Hanya No.2", which undertake the direct routes from Wuhan to Japan, were unable to return to Wuhan due to the impact of the Yangtze River flood season this year. On August 14, China Airlines Hanya 2, which had been suspended for more than a month, set sail with 101 TEUs, leaving Yangluo port for Japan. This also means the resumption of direct shipping to Wuhan.

Epidemic situation and trade friction to be solved

The main challenges for the development of the shipping industry this year are still the new type of coronavirus pneumonia and the Sino US trade frictions that have continued since last year.

"On the whole, the new crown pneumonia and Sino US trade frictions have a great impact on the shipping industry, and they have a long-term lasting impact. Compared with the new year, the import volume of Lentinus edodes and submerged mushrooms dropped sharply compared with the new year Li Kang said.

The decline of export will inevitably lead to the decrease of container transportation demand, and then affect the revenue of shipping companies. According to the sea intelligence report, container shipping companies are losing as much as $350 million a week due to the reduction in trade caused by the outbreak. Since the outbreak of the epidemic in January, the global container cargo volume has decreased by an average of 350000 TEU per week. If the average freight per TEU is estimated at US $1000, the global shipping industry will lose about US $350 million per week.

This judgment has also been verified in the 2020 semi annual report recently released by Ningbo shipping. According to the public information, Ningbo shipping mainly deals in the transportation of general cargo in domestic coastal areas, the middle and lower reaches of the Yangtze River and international ships. In the first half of 2020, the company's operating revenue reached 888.82 million yuan, a year-on-year decrease of 18.29%; the net profit attributable to shareholders of listed companies was 16.05 million yuan, down 87.66% year-on-year.

Ningbo shipping said that the obvious decline in the performance was due to the new global epidemic situation, excess capacity and other factors, that is, the international dry bulk transportation market was relatively weak from January to May. Since June, due to the rise of global iron ore freight and the increase of grain shipment in South America, BDI rose, but the average value in the first half of the year was only 685 points, a decrease of 23.3% year-on-year.

"However, just needed products like Foxconn's monitors and epidemic prevention materials have not been affected. For example, Xiantao is the hometown of non-woven fabrics, and products such as masks have become a demand for export under the epidemic situation of Xinguan. Basically, small feeder barges from Xiantao to Wuhan will be sent out every day, and then they will be packed in Wuhan and transported to Shanghai. However, this year is actually a more tragic year for the shipping industry. In general, the decline will continue for a long time due to the impact of epidemic situation, oil price drop and trade friction. It depends on when the turning point of globalization of the epidemic situation will come, and some relief may occur. " Li Kang added.

On the other hand, China and the United States have finally reached an agreement on the text of the first phase economic and trade agreement by the end of 2019. The U.S. side will fulfill its commitment to abolish tariffs on Chinese products in stages, putting an end to the Sino US trade friction that has lasted for more than a year.

However, in the shipping market, the impact of Sino US trade friction is not over. In the consolidation market, part of China's export volume is transferred to Southeast Asia, while in the bulk transportation market, China's import volume from the United States is also transferring to South America. After the Sino US trade friction eases, part of the volume of goods is expected to return. The prospect of Sino US trade in 2020 will still depend mainly on the actions of the United States.

In this regard, Jiang Ming, chief analyst of transportation industry of Tianfeng securities, pointed out: "Sino US trade friction is one of the biggest variables in the current global trade pattern and even the economic pattern, which also suppresses the prospect expectation of the shipping industry. However, most of the shipping products are raw materials, intermediate products and low value-added rigid consumer goods. With the passivation of emotional effect, the sensitivity of the shipping industry to Sino US trade relations is expected to gradually weaken. As for the consolidation market, there is less space for the United States to reduce its imports from China, and it is more difficult for the United States to reduce its imports of goods from China. China will probably increase the import volume of electrical machinery, electrical equipment, audio-visual equipment and industrial equipment products from the United States. "