Effects of COVID-19 Outbreak on the Car Shipping Industry - Global Trade Magazine
  May 5th, 2020 | Written by

Effects of COVID-19 Outbreak on the Car Shipping Industry

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  • As the coronavirus pandemic got stronger, the economy of the affected countries grew weaker.
  • If the car shipping industry is to recover from the effects of COVID-19, it needs to do so slowly.
  • During the hiatus of the pandemic, international car shipping was practically non-existent.

There is hardly an industry in the world that hasn’t been affected by COVID-19. While tourism and travel industries have arguably suffered the most, industries related to shipping are not far behind. So, what precisely are the effects of the COVID-19 outbreak on the car shipping industry, and how will it behave in the following months? Well, that is what we are here to find out.

How COVID-19 affects car industry

To get a good understanding of the effects of the COVID-19 outbreak on car shipping we first need to take a look at the car industry itself. After all, a big part of car shipping is closely connected to car manufacture and sale. So it stands to reason that any effects that the coronavirus outbreak has had on the car industry will have a ripple effect on car shipping.

Reduced production

The best way to imagine the effect of the COVID-19 pandemic is to envision it as a wave. It started off in China and then made its way into numerous countries. This means that it did not affect all countries at the same time. Therefore, there is a notable time difference when the COVID-19 started effecting companies depending on where those companies were situated. And there will be a notable time difference to when these companies will be able to start recovering from the effects of COVID-19.

Worker safety

The first effect that COVID-19 has had on both the car industry and the car shipping industry is the mandatory safety standards for workers. Standards such as:

-Physical distancing.

-Hand sanitation.

-Mandatory masks and protective gloves.

-Increased ventilation.

Countries were quick to instate these measures, as they are the most cost-effective. And they will also be the last ones that the countries are able to lift. This, as you might guess, makes the overall industry a bit slower. Not only do workers have to take the time to adhere to these regulations, but, there is also an increase in state inspections that ensure that those regulations are met.

Little to no demand

As the coronavirus pandemic got stronger, the economy of the affected countries grew weaker. After it became evident that the safety measures weren’t enough, countries turned towards lockdown and curfews. This has led to a significant drop in trade. The full economic repercussions of the coronavirus pandemic are still hard to quantify. But, if there is one thing we can say for sure, it’s that the demand for cars has plummeted as a result. People were fearful of losing their jobs. And seeing that 22 million Americans claimed for unemployment benefits as a result of COVID-19, those fears were not without ground. And the last thing that unemployed or scared people do is go out of their way to purchase cars.

The following effects of COVID-19 outbreak on the car shipping

So, with the reduced trade and halted production, what were the following effects of the COVID-19 outbreak on car shipping? Well, not good. There is hardly a shipping company that hasn’t taken a hard financial hit due to worldwide lockdowns. Companies that also deal with medical shipping did fair a bit better since a lot of countries urgently needed medical supplies. But, when it comes to car shipping, companies have slowed down to a crawl.

International shipping

Since almost 80% of car manufacturers have some part of their production done in China, they were among the first industries to feel the effects of the COVID-19 outbreak on car shipping. Once the outbreak started it was almost impossible to ship cars or car parts outside of China as the country soon went into lockdown. This scenario, as we mentioned, occurred in subsequent countries as they became affected by COVID-19. International trade, and therefore international shipping of cars, has slowed down considerably. Now, since it is fairly safe to ship cars even during COVID-19, companies managed to tackle a large number of shipments scheduled before the COVID-19 outbreak. But during the hiatus of the pandemic, international car shipping was practically non-existent.

Local shipping

When it comes to local shipping, car shipping companies are doing a bit better. Companies that are situated in a country with a decent local economy had no trouble dealing with local car shipping needs. After all, intrastate shipping has far fewer restrictions during the COVID-19 outbreak.

Moving industry

A big part of car shipping is related to the moving industry. After all, one of the reasons why people choose to ship their cars is because they need to move. Or, they have already relocated and they need their car shipped to them. So, with this in mind, what was the effect of the coronavirus on the moving industry (when related to car shipping)? Well, again, not good. Relocation was practically non-existent in the past couple of months. This, in turn, means that people didn’t ship their cars due to relocation. There was a decent amount of people moving back to their home states when quarantine measures were instated. But, international car shipping was difficult, to say the least.

Recovery

If the car shipping industry is to recover from the effects of COVID-19, it needs to do so slowly. As of writing this article, the coronavirus pandemic is slowing down and countries are lifting certain safety measures. Therefore, we should see an increase in international trade, especially from China (which is quite important for car shipping). But, if we are not careful, we might see another coronavirus pandemic in the near future. The key thing here is for countries and companies to slowly tackle the recovery process and to keep public health in mind while increasing trade. Only by doing so will the effects of the COVID-19 outbreak on the car shipping industry wane. After all, the last thing we want is for another wave of the coronavirus to hit.

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Scarlett-Rose Duffy is an established expert in the moving and shipping industry. She is most known for work as an industry advisor, in addition to her work with All Season Movers NJ.