The global economy’s most abrupt and consequential shock in at least a generation is unfolding at ports and other hubs of international commerce as the U.S. and Europe struggle to contain the coronavirus pandemic. The Great Recession, the Sept. 11 attacks, the 1973 oil embargo — none of these modern crises constricted trade flows as quickly and as sharply as the Covid-19 disease has. Not even World War II delivered the kind of sudden economic knockout that is paralyzing global supply chains and rendering almost silent the most bustling cities in the developed world as businesses close and consumers obey orders to stay at home.
“This could be seen as a war-like scenario without the physical asset destruction,” World Trade Organization Chief Economist Robert Koopman told Bloomberg in a telephone interview.Incoming data from some of the world’s busiest ports, already seeing diminished cargo traffic with China’s economy shut down during the past two months, paint an ugly picture of a further collapse that many economists expect to persist well into the first half of the year.
U.S. import and export volumes slowed in the weeks leading up to shutdowns in American cities, according to IHS Markit data compiled by Bloomberg. U.S. exports have been hit particularly hard, and those figures will be key to watch in the days ahead to gauge the severity of the downturn.
The port of Shanghai — the largest in the world — saw a 20% year-over-year drop in container throughput in February, according to the Shanghai Municipal Statistics Bureau. Last month, cargo volume at the Port of Long Beach declined 9.8% from a year earlier and the total container throughput at Hong Kong’s port fell 11% on a cumulative basis.