Freight demand may be falling significantly. Image Credit: File Image / Pixabay
The COVID-19 virus outbreak could cause a decline in freight demand of as much as 20% in the first quarter of this year, according to ro-ro shipping company Wallenius Wilhemsen.
“Over the past weeks, plant closures in Asia has caused parts shortages, disrupting the inbound supply chain to vehicle production leading to lower output and less volumes shipped,” the company said in an emailed statement Friday.
“This has added to an expected volume reduction due to selective contracting and already softening sales of vehicles and high & heavy, which is estimated to result in a 20% reduction in ocean volumes for Q1 2020 compared to Q1 2019.”
The extent of the impact in the second quarter will depend on the rate of recovery in Asia, the spread of the virus and the reaction in the global economy, the company said.