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How the Coronavirus is Impacting the Transportation Industry

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There are lots of factors that influence the transportation and logistics industry from political to economical. One aspect that many people don’t consider is medical. As the deadly coronavirus continues to spread across the globe, the transportation industry is now facing new challenges.


The coronavirus outbreak began in Wuhan, which is in the Hubei province of China. Wuhan is centrally located between Shanghai, the largest city in China and the world’s busiest container port, and Shenzhen, an area known for manufacturing and exporting.

 

 

While Wuhan is a good distance from these major cities, it’s a major transportation hub for China. The virus, unfortunately, broke out around Chinese New Year, during which the country takes a weeklong break, with many people traveling. Due to the high travel rates, an untold number of people passed through Wuhan or traveled alongside those that had recently been there. There are now over 24,000 people infected globally with the coronavirus and the death toll has risen to 490.

 

 

As the world is grappling with preparations, the transportation industry is already beginning to feel the effects. Airlines worldwide have suspended or restricted flights to China and surrounding areas. The air cargo industry is already suffering from a reduction in capacity on passenger planes.

 

 

Maritime cargo is also beginning to feel the effects. Chinese imports account for roughly 40% of all shipments entering the U.S. While the transportation and logistics industry know there is always a sizeable decrease in shipment volumes in the weeks after Chinese New Year due to factories closing, with the coronavirus extending this shutdown the decrease in cargo shipments is expected to drop further.

 

 

Rail and trucking shipments should soon begin to feel the impact of the coronavirus as well. There will likely be a noticeable decline in freight volumes due to the loss of production from Chinese New Year and the coronavirus outbreak.

 

 

There is no telling how long this will last. The virus is still not contained, meaning the industry has not seen the peak of the impact yet. China has extended the Chinese New Year break, which means production will remain offline for at least another few weeks.

 

 

The transportation and logistics industry should expect to feel the impact of the coronavirus for a few more weeks. However, once Chinese production begins again there will be a surge demand to move pent-up inventory once it arrives. As China business dries up, carriers and shippers should turn their attention elsewhere while also preparing for the wave of demand that will come once things get running again.  

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