Norwegian shipowners fear their revenues will plunge 35% on average this year due to a pandemic crisis that is set to be worse than the 2008 financial crash and the 2015 offshore slump combined.
The Norwegian Shipowners Association (NSA) said figures from its members indicate that the coronavirus outbreak will hit all segments hard.
NSA's members employ over 55,000 seafarers and offshore workers from more than 50 different nations.
Based on a survey among these members, owners fear a decline in turnover of nearly 35%, amounting to more than NOK 83bn ($8bn).
The forecast for 2020 is now for a total of NOK 161bn, down from NOK 244bn previously.
The decline will outstrip previous recent crises precisely because all ship types will be affected.
Previously, the fall in turnover in one segment has been outweighed by an upturn in another.
Serious situation
"These figures clearly illustrate the seriousness of the situation for our industry," said Harald Solberg, chief executive of NSA.
"A 35% decline in turnover would be dramatic. It is essential that we find good solutions to keep shipping going through the crisis."
Passengership operators are obviously facing the biggest hit, due to travel restrictions.
Members are preparing for a 90% drop in revenue.
Virtually all passenger transport has been halted in and out of Norway.
"These companies have seen their revenue base fall away overnight, while customers are entitled to having ticket expenses reimbursed," NSA said.
"With other fixed costs running as normal, the government-imposed travel restrictions have put these companies in a challenging liquidity squeeze."
Offshore woes to continue
Offshore support vessel (OSV) owners too are facing major consequences, NSA said.
The already depressed sector has also had to deal with a dramatic fall in oil prices this year.
OSV companies expect to lose 25% of their revenue, with rig companies projecting a 30% decrease.
This would be worse than 2015, the first year of the offshore downturn, and equal to 2016.
Deep sea shipping members estimate that turnover in 2020 will be about 35% lower than in 2019, equalling the drop during the financial crunch of 2008/2009.
Tanker owners have been enjoying booming rates for much of this year so far, however.
Oslo-listed ADS Crude Carriers said in its annual report on Friday that the consequences of the crisis are unknowable, but it is well placed to take advantage if tanker markets stay strong.
Short sea owners seem to have been hit least severely, NSA said.
"However, the decline indicated by short-sea members is expected to be about twice that of 2009, during the financial crisis," it added.
Operational challenges
Crew changes have been a key obstacle for owners and are expected to continue to be very demanding, the association said.
A large number of member companies have chosen to extend contracts with existing crews.
But these extensions are running out, and soon the need for crew changes will become critical, NSA added.
"Shipowners fear that the operational challenges will increase substantially in the time to come," it said.
More than 1,800 Norwegian ships operate globally.
With the planet increasingly shutting down, "there is reason to believe that moving crews across borders will only become more difficult," NSA said.
It added the lack of coordination in quarantine requirements at the international, regional and national levels is complicating this further.
"This will probably be one of the most demanding issues shipping companies face, unless international guidelines are put in place for crews to travel freely," it said.
"It is also crucial that time spent at sea should count towards quarantine requirements for crews, meaning healthy crews that have had not had a chance to land for 14 days should be considered disease-free."
Temporary redundancies inevitable
The survey also showed that half of owners may have to temporarily lay off staff in the next two weeks.
Ferry operators have already laid off about 5,200 people as ships are taken out of service.
OSV owners also look likely to furlough staff.
About 67% of these companies say redundancies are possible.
NSA said: "Shipping is crucial for both the flow of goods and for offshore activity. Our clear goal is to help maintain the supply of goods and energy production through this Covid-19 crisis."
