Barge operators are joining other industries across the country in assessing how the coronavirus outbreak could affect their business and their employees.
As the world tries to stem the outbreak, a global economic slowdown is emerging, especially in key barging markets like China, which is forcing the navigation industry to prepare for a softening demand for its services. The timing couldn’t be worse, as barge lines were just beginning to recover from a punishing year of high water and trade disputes in 2019 that presented nonstop operational and financial challenges.
“We are definitely watching this closely,” said Jennifer Carpenter, president and CEO of the American Waterways Operators. “Anything that dampens consumption in China or productivity in China has reverberations thoroughly the supply chain. Just when we were getting the traffic back from the trade war and seeing a little cause of optimism,” the coronavirus hits.
WEAKENED DEMAND ALREADY BEING FELT
Rick Calhoun former head of the U.S. barge division at Cargill Inc., said demand from China and other global customers that had slowed during last year’s trade wars and tariffs is narrowing further under restrictions being imposed across the globe in the wake of what is now being called a pandemic.
“We’re not operating at anywhere near capacity right now” on the river system, Calhoun said at a press briefing last Thursday held by the Waterways Council, Inc (WCI). “There’s just not the demand because of what’s happening in China and around the world.”
There is also growing concern that an economic slowdown might mean that China won’t be able to fulfill a promise to buy more U.S. agricultural products like soybeans under Phase One of the recently completed U.S.-China trade deal, which essentially ended a trade war that lasted more than a year.
Grain markets and soybeans are at their lowest levels as traders await news on whether China will buy more U.S. crops, while low volumes of soybean exports continue due to the impact of the virus and the persistence of African Swine Fever on China’s hogs, which are major consumers of soybeans.This has important implications for the barge industry, which has seen its soybean business plummet over the past year, and was hoping for new business under the trade truce with China.
Deb Calhoun, acting president and CEO of the Waterways Council, said this was a top concern at the National Grain and Feed Association Convention she attended on March 10.
AWO has posted a planning guide on its website to help barge companies develop and implement a COVID-19 contingency plan that it says will protect the workforce “while ensuring continuity of operations.”
Among other things, the guide advises that a vessel master monitor the crew for any symptoms and report these to dispatch, and that crew members inform the master immediately of a fever over 104F. Those showing symptoms of acute respiratory illness should be isolated until he or she can be removed from the vessel. Regulations require that “illness of a person onboard that may adversely affect the safety of a vessel or port is a hazardous condition” and must be reported to the Coast Guard and the Centers for Disease Control.
Other sectors of the maritime industry are feeling impacts. Many U.S. ports are experiencing reduced shipments from Asia, while global container lines, already struggling to pay costs of new IMO regulations, are canceling deliveries to Asia and suffering revenue losses.
Meanwhile, the coal mining company Foresight Energy LP filed this week for bankruptcy, the latest in failing coal companies across the nation. In addition to competition from cheap natural gas and cleaner sources of energy, Foresight also blamed the global economic slowdown caused by the coronavirus. Coal is traditionally one of the biggest commodities in volume moved on the waterways and it has been on a steady decline.
Elsewhere, the American Association of Port Authorities (AAPA) has decided to cancel its March 17-19 2020 Spring Conference event in Washington, D.C.
“It’s disappointing to cancel this annual port industry conference, particularly since AAPA had planned an excellent agenda with high-ranking government officials, public policy influencers, and business and port authority leaders from throughout the Western Hemisphere who were lined up to make presentations and lead discussions on public port challenges, successes and lessons learned that are making national and international news,” organization officials said in a statement. “These concerns, however, pale in comparison to the importance of keeping people healthy and assisting authorities in their efforts to contain the virus and get the necessary care and attention to those who need it.”
In New Orleans, the Offshore Marine Service Association (OMSA) has decided to cancel its Spring Committee Meeting scheduled for March 24.