Evaluating the economic impacts of COVID-19 pandemic on shipping and port industry: A case study of the port of Shanghai

Abstract

The stability of shipping and port operations are crucial for international trade and global supply chain. However, the COVID-19 pandemic hit the shipping and port industry enormously in late 2019, and continues till now. It is important to identify the impacts of the pandemic on shipping and port operations and evaluate the potential economic impacts for better setting future development strategies and policies. A System Dynamics (SD) model is proposed to depict the impact transmission within the supply chain considering 5 sub-systems (shipping, port, transportation, manufacturing and social). Potential economic impacts which are represented by the shipping loss and port loss will be assessed. 6 scenarios with different epidemic durations and capacity recovery degrees have been set to investigate the economic impacts. The port of Shanghai, together with the container shipping business is selected as input for case study. Results indicate that in the first few months the port and carriers may suffer economic loss due to shrunken demand caused by COVID-19. But later carriers may enjoy an increase of income compared to non-pandemic scenario owing to strong recovery in most scenarios. Moreover, we found that manufacturing, transportation and port operation capacities would jointly affect the recovery process and economic impacts. The findings can facilitate policy makers in making port management and future industry development decisions.