The impact of Japan’s earthquake and tsunami on shipping

While the earthquake and subsequent tsunami that hit Japan last week immediately disrupted transportation and logistics operations throughout the country, the scale of the disaster’s impact on the shipping industry is still unknown, says BIMCO.

 

Whether directly affected, i.e. damaged or destroyed by the earthquake and/or the tsunami, or indirectly affected, e.g. an assembly line relying on just-in-time deliveries, it will be a while before a lot of Japanese manufacturers regain their normal output levels. Productivity may also be affected by power cuts.

While this will have an immediate negative impact on the demand for export shipping, BIMCO points out that, as the situation starts returning to normal, the demand for shipping may be higher in the medium- to long-term because of this natural disaster.

According to BIMCO, the lack of exports from Japanese factories may well cause liner companies to leap-frog Japanese ports on their transpacific trading lanes.

There are also implications for import shipping.  Dry bulk shipping may be impacted in many ways, as Japan is a major importer of thermal coal for power generation, iron ore and coking coal for steel production and grains for food and feedstock. Several nuclear power plants may be shut down for days or weeks, and some coal-fired power plants have lost their coal stocks to the floods.