News & Market Insight

Make no mistake, this is an unprecedented global crisis. It seems soon every industry will be affected by the unfolding events.

As a result, breakbulk and project freight sectors will have to prove their resilience over the coming months.

Breakbulk & coronavirus

Multipurpose growth stalls due to coronavirus 

According to a survey from Project Cargo Journal, 70% of logistics firms will have their business affected. 40% of respondents said most of the impact will come from their Asian business.

Lower demand, suspension of services, and delays in existing projects were identified as the biggest issues arising from the crisis.

Companies are looking for alternatives and workarounds to cope. PCJ survey participants highlighted efforts to move cargo to rail and alternate transport modes from shipping, vessel relocation, and developing business in areas so far less affected by the pandemic.

Geodis, for example, is offering air and rail services from European hubs to Chinese terminals in a bid to keep both business and goods flowing.

Two rail options are scheduled from Xi’an and Chongqing to the German destinations of Hamburg and Duisburg. The standard services have an 18-day transit time and from Xi’an to Hamburg, an express, 12-day solution is provided. Return routings are also available.

The company has established a weekly air charter service between Frankfurt and Shanghai Pudong International airport.

MPV, however, does now face stiffer competition now to chase project cargo from breakbulk and container shipping. Industry analysers Drewry’s initial 1.8% global industry growth for the multi-purpose sector is likely to look more like recession as the year progresses.

Delays in European wind development likely coming

First analysis suggests that COVID-19 will have a large effect international supply chains for wind energy, industry organization WindEurope states.

With the situation in Europe become more dramatic, it is likely that a large impact on production and revenues in the sector, the organization adds. The first logistical delays in the supply chain can be observed already.

“A knock-on effect of a slowdown in China’s manufacturing output is already visible in other countries. We will need to take a strategic approach to ensure that disruption is minimised”, says WindEurope CEO Giles Dickson.

“With COVID-19 we are likely to see delays in the development of new wind farm projects which could cause developers to miss the deployment deadlines in countries’ auction systems and face financial penalties. Governments should be flexible on how they apply their rules. And if ongoing auctions are undersubscribed because developers can’t bid in time, governments should award what they can and auction the non-awarded volumes at a later stage”, Dickson adds.

Even so, Siemens Gamsea, the main global supplier of wind farm technology and components, has said it aims to keep production, delivery and installation activity going for as long as possible. 

Renewable energy development is one of the key drivers of European project cargo. If other companies follow Siemens’ example, and continue with their work, then it can help cushion the blow breakbulk is currently reeling from.

A spokesperson of Groningen Seaports confirmed that port operations are currently proceeding as normal, with all companies following Dutch government guidelines. 

Groningen Seaports is the port authority of Delfzijl and Eemshaven, which are important hubs of the offshore wind industry in the North Sea. Other Dutch offshore ports like North Sea Port and the Port of Rotterdam are also maintaining operations.

Trying times ahead for Europe’s breakbulk sector

As all European countries tackle this massive ongoing challenge, the breakbulk sector will face difficulties of its own.

Breakbulk Europe remains committed to supporting and aiding industry recovery wherever it can. From the event’s revised date, Breakbulk will continue to serve this vital industry.

Stay tuned for more updates, but feel free to contact the team with any questions or queries you may have.