Tue, 31 Mar 2020

The global economy's most abrupt and consequential shock in at least a generation is unfolding at ports and other hubs of international commerce.

The Great Recession, the September 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 paralysing 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.

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.

As reported cases approach half a million people worldwide, the disease has forced governments to implement nationwide lockdowns that have stalled factories, closed many restaurants and retail shops, and left consumers scrambling for necessities. The result has been a twin supply-and-demand crisis that's upended the shipping industry, which transports about 80% of the world's food, energy, raw materials and manufactured goods.

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