Missed port calls by container vessels offer early insight into economic slowdown

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The effect of the coronavirus outbreak on world trade is yet to become clearly visible in shipping data, but there are already signs of a slowdown.

The number of missed port calls – scheduled port visits that are skipped by the vessel – is one way to measure the immediate impact of a slowdown in the global movement of goods. If demand for freight drops, ship operators will drop a scheduled port visit to let the volume build up for the next ship that will call on that port.

At the moment, the ratio of missed calls is low in the historical comparison, suggesting that so far there is little disruption. The number of scheduled calls however is down substantially from both last January and from January 2018. This is warping the historical comparison because ship operators have already rationalized their operations in reaction to the trade war.

Globally, there were some 12,250 port calls scheduled in January 2020 on the world’s major trade lanes. This is down 14% from January 2019 and 18% from January 2018. The ratio of missed calls to scheduled calls last month was 13%, three percentage points lower than in January 2019 and 4 percentage points lower than in the same month in 2018.

For China, scheduled calls are down 15% from January 2019 and 21% from January 2018. The ratio of missed calls at Chinese ports last month was 9%. The miss ratio matches the January 2018 number and is two percentage points lower than the January 2019 level.

The miss ratio in January is typically small as factories in China scramble to ship out orders ahead of the two-week closure for Chinese New Year. This year, the effect has been muted because shipping companies had already cut services due to the trade war with the US. Also, with bigger ships in most major lanes, the number of calls, both scheduled and missed, is lower.

As factories stay shut for longer, and economic activity in China slows, both the incoming and outgoing volume of goods is certain to drop. The number of missed port calls as we go into February and March will be an important early indicator of the extent of the economic slowdown.