Peter T. Leach | Mar 11, 2011 11:20AM EST
Japan's shipping industry and services will be hit across the board by the massive 8.9 magnitude earthquake and tsunami that slammed the country Friday, according to an initial assessment of the impact by BIMCO, the independent shipping association in Copenhagen.
"Container shipping may be impacted by lack of exports from the Japanese factories, causing liner companies to leap-frog Japanese ports on their trans-Pacific trading lanes," BIMCO said in its assessment. "Both imports and exports may be affected by force majeure."
Other analysts said the earthquake may be the most expensive natural disaster, with estimates of the insurance loss running as high as $10 billion.
In the short-term, demand for shipping will stop and only slowly start to move once things get back to normal. In the medium to long-term outlook, demand for shipping may be higher because of this natural disaster, said BIMCO, which provides research for its membership, which consists of shipowners, managers, brokers, agents and other maritime stakeholders.
The ports in the northern part of the country are most affected by the quake and the tsunami. "All ports in that area are assumed to be out of order as operations have stopped and port facilities may have been washed away," BIMCO said.
More than 40 ships were scheduled to arrive or depart at the port of Yokohama on Friday. The port ranked 39th on the JOC's list of Top 50 Global Container Ports for 2009, with volume of 2.8 million 20-foot equivalent units of containers.
Dry bulk shipping may be impacted in many ways as Japan is a major importer of thermal coal for power generation, iron ore and coking coal for steel production and grains for food and feedstock.
Several nuclear power plants may be shut down for days or weeks, and coal-fired power plants have experienced coal stocks getting flooded away.
Some 18 percent of Japan's refining capacity was shut down by the quake. BIMCO said tanker shipping may be affected as refineries are on fire, reducing product tanker demand.
Moreover the nuclear power plant shutdown may also affect overall oil imports for power generation.
-- Contact Peter T. Leach at pleach@joc.com.