Pandemic, Piracy, and Panic on the Pacific Rim

Although the supply chain markets of the western world appear to be recovering, new threats in the Asia Pacific have some industry analysts concerned about a crisis that could cripple supply chains in the region. These threats include the stubborn pandemic variants and a resurgence of piracy.

According to Thomas Cullen, an analyst at London-based consultancy, Transport Intelligence (Ti), the latest problems are emerging in South East Asia, with both Malaysia and Vietnam experiencing intense disruptions due to anti-Covid measures.

He further observes that Malaysia is suffering a substantial outbreak of disease and although ports and airports are operating moderately well, much of the rest of the economy is being affected.

“In particular press reports have drawn attention to the semiconductor industry which is experiencing disruptions in production due to quarantining workers,” says Cullen.

“Vietnam is also seeing an accelerating crisis with intense outbreaks leading to much of the country to enter various extremes of quarantine behavior leading to severe problems around port and airport operations.”

Ho Chi Minh City, which is an important sea hub as well as a manufacturing center, seems to be in a state of near-martial law with a curfew being imposed by troops patrolling the streets.

“The impact on both freight transport and supply chains is likely to be substantial,” says Cullen. “The wave of goods imported from Vietnam since the middle of 2020 has been an important component in the congestion seen in the U.S., especially on the west coast ports, due to American consumers buying Vietnamese manufactured products, such as furniture, in remarkable quantities.”

If this flow of goods is now to experience further disruption, then it would be logical to assume that congestion and dysfunction in areas such as container movements will get worse.

“The danger is that COVID-19 will spread across the whole region and possibly spread to economies in North Asia such as Japan and South Korea,” says Cullen. “This represents a further leg in the crisis with the consequence that dysfunction in international logistics markets may increase.”

Add to these worries that the age-old threat of piracy, and Pacific Rim shippers may have cause to panic. Indeed, The International Maritime Bureau’s Piracy Reporting Center (IMB PRC) reports that the increased crime in Southeast Asian seas was “inevitable.”

Besides the COVID19 hardships already faced by seafarers, 2020 saw a year-on-year increase in global piracy, with a record 130 crew kidnapped in the Gulf of Guinea, a continuing rising trend of armed robberies against vessels in the Singapore Strait.

The incidents recorded by the IMB PRC in 2020 were fairly evenly split between vessels at anchor and vessels underway.

Attacks on vessels at berth are still less common and accounted for only 7% of all incidents recorded in 2020.

While the typical merchant vessels, such as tankers, bulk carriers, container vessels, and general cargo vessels were involved in more than 80% of all the incidents recorded last year, the data from the IMB PRC shows that all types of vessels were targeted.

Incident reports from tugs, fishing vessels and various offshore support vessels, and even a drilling ship, are also part of the recent statistics.

Furthermore, new evidence suggests that the coronavirus pandemic has had an impact on security threats at sea, with analysts contending that the pandemic – at least over time – may indirectly affect the overall risk related to piracy and armed robbery.

Concludes Ti’s Cullen: “With Asia Pacific shippers already facing large increases in prices for both sea and air freight, the situation moving into the Christmas peak season may become very serious.”

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