GERMAN shipowners fear the coronavirus pandemic could be placing the country’s role as a leading shipping location in jeopardy and have long-term consequences for the industry.
A survey of 50 of leading shipping companies conducted by the German Shipowners’ Association (VDR) found that revenues were down by 30%-40% during March and April, with 44% reporting “substantial impairment” to their liquidity.
“Cruise and ferry shipping were severely impacted by the pandemic right from the outset,” said association president Alfred Hartmann. “Our current survey clearly shows that almost all areas of the industry segment meanwhile are being heavily impacted.”
Charter rates in some sectors had fallen to as little of 40% of their previous levels and further declines were expected in the months ahead. Idling of container vessels, a sector in which German owners play an important role as tonnage providers, was also having an impact.
“In view of the severe collapse forecast for global trade, the market situation for maritime shipping is expected to escalate even further,” Mr Hartmann said. “This means that substantial segments of the German merchant fleet are foreseeably endangered in their existence.”
He pointed to the global financial crisis of 2008-2009, which led to the loss of a third of the national fleet.
“If production and consumption worldwide do not recover soon, then the consequences of the pandemic could be far more severe than the financial crisis,'' he said. ``And if we were to lose a further third of the German fleet, this would endanger tens of thousands of jobs at our location.”
Mr Hartmann, who has been involved in talks along with other industrial organisations with Chancellor Angela Merkel, said shipping would require support from the country’s KfW reconstruction load corporation, but that support measures had not yet materialised to the degree required.
“As most German shipping companies are small to medium-sized enterprises, they face extinction without effective support being provided under the KfW programmes,” he said.
Banks, he added, were being slow to forward support applications, despite the low residual risk to lenders and the fact that they had also been supported by taxpayer’s money in the past, creating a situation that was “absolutely intolerable”.
He also called for German shipping taxes to be reconsidered if the sector was to remain competitive globally, specifically citing the 19% insurance tax imposed on policies.
“Our location is no longer competitive in this case,” said Mr Hartmann. “We also need clarity as to whether the tried-and-tested instruments for stimulating maritime shipping in terms of vocational training, qualification and employment of seafarers in Germany will remain in place.”
The VDR survey contributed to a wider survey of European shipping that was published yesterday by the European Community Shipowners’ Association, which found that the pandemic had raised the spectre of large reductions in the workforce and investment.
