Watch Now

Our research on the coronavirus (with video)

(Photo: Wikimedia Commons)

The Wuhan coronavirus, formally known as 2019-nCoV for 2019 novel coronavirus, is spreading faster in Chinese cities, particularly in Hubei Province’s Wuhan in central China.

The Passport Research team has conducted research to compile what’s known so far about the virus from an epidemiological standpoint and what the likely macroeconomic and freight effects of the outbreak may be.

Learn more about Passport Research here.

We looked at preprints of academic papers uploaded to the internet by biologists prior to the lengthy peer review process in order to arrive at a best guess about the coronavirus’ virulence and the most likely course the outbreak would take. So far, it appears that the Wuhan coronavirus is more infectious, but less deadly, than the similar virus that caused the severe acute respiratory syndrome (SARS) outbreak in 2003.

The most recent and credible estimates of the coronavirus’ basic reproduction number, or Re value, are between 2.2 and 2.9, meaning that each patient is associated with between 2.2 and 2.9 additional infections. Those numbers have been revised sharply downward from early reports suggesting an Re of greater than 3, but are still significantly above the SARS Re value of 1.77-1.85.

Find the latest scientific research on the Wuhan coronavirus here. The World Health Organization (WHO) dashboard of coronavirus data (with confirmed infections by province and country updated at least twice daily) can be found here.

Already, the WHO has confirmed 4,474 cases of the coronavirus (4,409 of those are in China) and 107 deaths.

FreightWaves is tracking the course of the disease and the Chinese government’s response to it because, more than the absolute number of deaths caused by the disease, it is the control measures being implemented that will affect economic activity and freight flows. The higher infectiousness of the coronavirus relative to SARS means that these control measures may be more drastic, even allowing for the Wuhan virus’ lower mortality rate. 

For instance, there are now 80 confirmed cases in Beijing and 151 in Guangdong, the province containing the vital port city Shenzhen. Sixty-six cases have been reported in Shanghai’s province and 173 in the province where Ningbo, another large port city, is located. Shanghai’s local authorities have already suspended commercial activity — including the operations of all companies not involved in the medical field — until at least Feb. 9.

Quarantines, restrictions on the freedom of movement, work stoppages and the prohibition on commercial vehicle traffic are necessary to slow down the spread of the coronavirus and bring its Re value below 1, at which point the outbreak will start to fizzle out. But these very measures also will destroy industrial production, retail consumption and exports.

Several models predict that infections will at least double from current levels and that containment efforts will take several more months. The SARS outbreak in 2003 caused month-over-month declines in retail spending in excess of 6% in Hong Kong and cut China’s GDP growth by nearly 20% in the second quarter of 2003.

“Within our U.S. transportation coverage, FDX [NYSE: FDX] is most directly impacted (via the company’s sizable transpacific airfreight capacity), followed by companies with disproportionate exposure to China imports (notably JBHT [NASDAQ: JBHT] and UNP [NYSE: UNP]). But direct China exposure is limited across our land-based coverage universe outside of FDX and UPS,” wrote Deutsche Bank equities analyst Amit Mehrotra in a Tuesday client note.

The most obvious immediate result of quarantining and other control measures is the destruction of demand for energy products like gasoline, diesel fuel, jet fuel and crude oil because of lowered expectations for transportation.

Hundreds of thousands of barrels per day of demand for crude oil have been taken out of the market by restricted air travel. Crude oil benchmarks, including both Brent crude and West Texas Intermediate, have dropped sharply since details about the coronavirus emerged. 

While the outbreak is occurring during the Lunar New Year, a major holiday in China associated with lower manufacturing and exports activity, the coronavirus will extend and deepen the trough typically experienced in this period. Chinese officials have already extended the holiday, and if quarantines and lockdowns are implemented in Beijing, Shenzhen and Ningbo, outbound container volumes will be materially suppressed.

The most significant effect on North American surface transportation will be deep cuts to West Coast container volumes, putting a drag on BNSF and Union Pacific intermodal volumes as well as demand for trucking. The Southern California ports of Los Angeles and Long Beach function as the pulse of U.S. trucking volumes; if freight dries up there for an extended period of time in the first and potentially second quarter, capacity will loosen and rates will fall.

In trucking, “black swan” events like hurricanes typically create demand and tighten capacity, but the Wuhan coronavirus has the potential to be a black swan that destroys demand and loosens capacity. 


  1. Doc

    A very good article, but preventing the spread depends on the Chinese being truthful and trustworthy about what is happening with the infection in China. I’ve dealt with Chinese before. You can’t trust them as far as you can throw them. (Now I’ve said that, their reply is to get all offended and point the finger back at me saying “You a Racist!) But it’s true. They’ll say whatever they want to get whatever they want. Make a deal and they’ll break it as soon as things get tough for them. Don’t trust a thing you hear coming out of China on this.

    And how’s that Hong Kong situation working out? Pretty quiet there now.

  2. Noble1= Shamash (Shemesh/Utu) the Babylonian God of the Sun(god of justice, morality, and truth-(enforcer of divine justice )

    Not a bad article . However you should dig a little deeper . There are a lot more deaths and infected than you have reported . The outbreak doubles every 6.2 days according to a Hong Kong University which houses the world’s top 1% scientists according to Thomson Reuters.


    “The Coronavirus outbreak doubles every 6.2 days according to the prestigious Hong Kong University’s medicine dean Gabriel Leung.

    Secondly , the outbreak did not occur from where it has been originally been reported to have come from .

    You’ve just scratched the surface . Currently I would estimate the infected to be around 150k and deaths to be well in the thousands and increasing . They are falling like zombies in the streets and hospitals . Dig my friend , dig . It’s all out there .

    In my humble opinion ……….

Comments are closed.

John Paul Hampstead

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.