On April 1, The Alliance members Hapag-Lloyd, Yang Ming, Ocean Express Network and Hyundai Merchant Marine, announced the cancellation of 32 scheduled sailings this month.

"Taking blanked sailings as a proxy, we believe that there has been a 20 to 30 per cent decline in demand for container transport," said Sea-Intelligence director Andy Lane.

The World Trade Organisation now predicts global trade volumes will dive between 13 and 32 per cent this year as the covid-19 pandemic throws the world economy into turmoil.

The WTO report also warned that estimates of the expected recovery in 2021 were equally uncertain, with outcomes depending significantly on the duration of the pandemic and the effectiveness of policy responses by individual nations, reported Hong Kong's South China Morning Post.

The drop in trade and container cargo shipping will hurt Asia's ports as well. The Seaport Alliance, a consortium of operators at Hong Kong's Kwai Tsing container port, reported that container throughput declined by 11 per cent in the first two months of the year.

Sea-Intelligence believes that maintaining rate discipline is the key to container shipping companies' survival. In a "benign" scenario, shippers?volume would dive by 10 per cent in 2020 without any change in freight rates, leading to overall industry profits declining by US$6 billion compared to 2019.

A "worst case" scenario would see freight rates decline to levels seen during the 2009 financial crisis and a combined loss of $23 billion for carriers this year.

Mr Lane noted that in 2019, the 15 largest container shipping lines collectively posted an operating profit of $5.9 billion.

"Based on the financial performance of the carriers in 2009 after the 2008 shock waves, the carriers reported a 26 per cent [profit] decline year on year, and if anything close to that were to reoccur in 2020, the losses ?would erase combined profits for the last eight years," said Mr Lane.

Shipping analytics firm Alphaliner said that 338 containerships, representing 9.1 per cent of the global fleet or 2.12 million TEU, were idle at the end of March. However, Alphaliner expects the idled fleet to surpass three million TEU by May on the back of a second wave of cancellations.

"Unlike the first wave, which was mainly focused on China, the current wave of cancelled sailings will affect all container shipping routes around the world," said Alphaliner consultant Tan Hua Joo.

Drewry China director Han Ning said capacity will drop by 20 to 25 per cent on the Far East- Europe/Mediterranean route, and 17 to 20 per cent on the Far East to US route in the second quarter of this year.

The number of cancelled sailings rose 288 per cent in April 2020, compared to April 2019.

Drewry reported that April's spot freight rates were up 12 per cent against April 2019, suggesting that shipping companies" efforts to hold rates firm was working for now.

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