Covid-19 has crushed many industries. For the cargo shipping and cruise industries, the virus has been outright apocalyptic.
Travel bans, factory shutdowns, and reduced consumer demand have all hit the industry hard. What can ship operators do in response?
With hands tied, many are opting to scrap their ships. It’s better to sell them for parts rather than pay expensive fees to put them in storage.
The Death of a Ship: Recycling is the Only Hope
If you were to visit a ship-breaking yard, you’d get a first-hand look at the destruction taking place. From cargo vessels to cruise ships, there are currently many boats in the process of deconstruction. They’re stripped for steel and other valuable materials.
Along with the halt in global travel and cruise activity, reduced commerce is also a factor. People aren’t buying cars, which means cargo vessels are no longer needed to ship them. Economic shutdowns stopped other types of manufacturing activity as well. When people aren’t able to make as much money, how can they buy things? In situations like this, the cargo industry takes a big hit.
By October, operators had chosen to demolish 557 ships. That compares to a total of 889 for the entirety of 2019. The price of steel has gone up, making it more appealing to send a ship to the recycling yard. Operators can get a 20 percent return on the original price of the ship by doing this.
Another good reason to scrap a ship is the environment. In the coming years, the industry will put billions of dollars toward creating environmentally friendly ships. They might as well get started now.
Looking Ahead: The Future of the Cruise Industry in the Era of Covid-19
In early November, Pfizer announced that progress is being made on a covid-19 vaccine. This is good news, but will it help the cruise industry?
Unfortunately, it may be some time before people feel safe stepping aboard a cruise ship again. Cruise ships, such as the Ruby Princess in Australia, were at the center of the outbreak earlier this year. After the ship released passengers at the Port of Sydney in March of 2020, many aboard tested positive for covid-19. Research later showed that countries that let passengers disembark from cruise ships had a higher rate of infection. This resulted in many people getting stuck on ships, unable to disembark. Cruises already had a bad reputation for outbreaks of acute gastrointestinal illnesses.
Although such outbreaks are uncommon, public perception is what matters. No one wants to get trapped on a cruise ship for months, and no one wants to catch covid-19. Sadly, it may be some time before the industry flourishes again.