Firm Announces Temporary Layoffs of 2,000 Workers over COVID-19 Impact

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*Coronavirus pandemic sets off a new wave of blank sailings
WMN.. Finnish Konecranes has unveiled intentions to temporarily lay off some 2,000 employees as a result of coronavirus impact on the company’s operations.
The company said it has invited Finnish works council representatives to negotiations regarding the layoffs which would cover all of Konecranes’ Finnish operations.
The company said the layoffs were driven by the business disruption caused by the spread of the novel coronavirus disease.
“In starting discussions in Finland, Konecranes seeks to explore all possible temporary measures to adjust costs to the uncertain global business environment. The company cannot estimate at this stage what those measures will ultimately be, but the period of temporary layoffs would be up to 90 days at most,” the company said.
Konecranes has also been active in reducing costs across the full scope of the company’s global operations.
Restrictive measures imposed by governments across the world have limited Konecranes’ ability to complete the installation of new equipment and perform certain service operations. Moreover, Konecranes’ own manufacturing operations have been impacted by the significant and increasing measures to contain the pandemic.
Reflecting this development, on March 26 Konecranes updated its demand outlook and withdrew its financial guidance for full-year 2020., reports World Maritime News.

Meanwhile, just as the number of blank sailings out of China by container carriers started to subside, the industry is bracing for another surge on the Asia-Europe trade as the coronavirus pandemic spreads to Europe.
The number of blank sailings jumped from 2 to 45 on the main deep-sea trades last week, according to Copenhagen-based consultancy Sea-Intelligence.
2M alliance between the two container shipping majors Maersk and MSC was especially active as the two carriers temporarily withdrew the AE2/Swan and AE20/Dragon services on the Asia-Europe trade for the entire second quarter of 2020.
However, if demand picks up earlier than expected they might also resume service earlier. The capacity withdrawal equals a 21% capacity reduction in the trade.
“Given the short notice as well as extended duration, this can only be seen as a reflection in a similar sharp decline in both active and expected booking activity from their customers. It should, therefore, be expected that this week will see a further rapid escalation in the amount of blank sailings both by other carriers as well as in other trade lanes,” Alan Murphy, CEO of Sea-Intelligence, said.
Furthermore, quite a few of the blank sailings from all the alliances are made with a notice time much shorter than usual. This shows that the drop-off in booking levels is happening very quickly, the consultancy estimates.
The effect of the virus outbreak in China was the cancellation of more than 100 sailings. The spread of the pandemic to Europe and the Americas is set to have an even more substantial impact.
“All in all, both shippers and carriers are entering a period where significant amount of time and effort needs to go into exception handling. When shippers see a sharp decline in demand for their goods, they naturally have fewer containers to ship, and hence have no choice but to book significantly less cargo than originally planned.
“When carriers see such a sharp drop in booking activity, they have no choice but to cancel sailings,” Murphy added.
The canceled sailings will require a reshuffle of the supply chains, and the new arrangements are expected to be ad-hoc as market uncertainty lingers on…. Reports World Maritime News.