 COVID-19 is a game-changer for every link in the transport chain, from cargo ships to trucks, trains and air freighters. Amit Mehrotra, the managing director of air freight, surface transportation and shipping at Deutsche Bank NYSE: DB, is one of the rare professionals who covers the entire gamut.During a lengthy interview with FreightWaves on Monday, Mehrotra opined on coronavirus consequences for the worlds supply chains and explained why he believes some transport companies will see stock valuations skyrocket in the crisis aftermath. The following is an edited version of that conversation:Container imports and globalizationFreightWaves: There have been massive swings in U.S. imports over a short period. Whats your view on current volumes? Whats still coming in and whats not?Mehrotra: Were bracing for a pretty significant leg down in container imports to the U.S. We think there could be a 20-plus decline in imports through September. What weve seen so far is a supply-chain-driven decline in volumes. I think whats coming is a second wave that is an organic-demand-driven decline in volumes.We havent really seen the fallout yet from the financial turmoil a lot of people are finding themselves in. The bottom line is were going to have 20, 25, 30 unemployment in this country. Whats coming is the real air pocket in demand. Its not going to zero people are still going to need essential items: food, beverages, personal care, dry goods. But they wont need that sweater and that new pair of shoes, and a significant chunk of the economy is retail apparel.How important are U.S. container imports to land-transport volumes, whether trucking or intermodal rail?Its very important for land transport. Its undeniable. There is more of a lag with trucking than with intermodal; with trucking loads, there is a 65 correlation with port imports on a one-month lag basis. Every trucking executive will tell you that port imports are a very big absorber of capacity.Do you think this crisis will cause global supply chains to diversify away from China, or for there to be some deglobalization and nearshoring or both?Both. There are going to be huge implications for how freight moves globally. I was talking to the head of supply chain at one of the worlds largest retailers, which serves 100 million households in the U.S. 70 of U.S. households. And he said that 80 of their supply chain still comes from China and they dont believe it makes sense anymore.Diversification of supply chains away from China to countries like India and Vietnam will very obviously be a long-term implication of this, but I also think there will be more nearshoring. I cover Kansas City Southern NYSE: KSU, which has a lot of exposure to Mexico, and they are seeing this trend. We were already seeing it before coronavirus as wage inflation rose in China.Transport stock upside ahead?How do you think the coronavirus is going to affect transport stocks in the medium term? What are the bellwethers youre looking at with regards to the shape of any recovery curve?I want to say this very clearly: My personal belief is that I hope we find a vaccine and everybody is healthy and this is over as soon as possible. But purely in the context of assessing stocks, I dont really care about the shape of the recovery. I think the slope of the recovery is irrelevant as long as its positive. If it turns out that the slope of the curve is negative, equity values in the near term have a big leg to go down, but I think the bottom is in.I was probably the most bullish transportation analyst out there last year and obviously the coronavirus derailed that to some extent, but the underlying premise of my bullish view is wholly intact. My view is that whats going to happen over the next 12-18 months will be very positive for equity valuations. What I believe youre going to have for equity valuations is a perfect storm: one, very low interest rates; two, low capital intensity because everybodys cutting CAPEX; and three, accelerating growth expectations. I know this could be considered a perverse argument but for better or worse, 2021 growth looks better today than it did three months ago, because 2020 is down in absolute terms due to the coronavirus.Were talking about a 20, 25, 30 negative GDP print in the second quarter. Its completely unprecedented. Anytime you have such a disproportionate decline in GDP, its typically followed by a significant release in pent-up demand.As an example, Europe is maybe one month ahead of the U.S. in terms of coronavirus impact. XPO Logistics NYSE: XPO has said that in Europe, its volumes in the last week of April were 23 above volumes in the first week of April. If we can get that type of sequential improvement, transport equities are going to skyrocket, not necessarily because earnings expectations are going up but because people are going to capitalize earnings expectations in the midterm at much higher multiples.In general, equity values are much more levered to the multiples you place on earnings than the actual earnings themselves. If you earn 10 per share and grow earnings to 11, then all else equal, your stock price goes up 10. But if your multiple goes from 10 times to 12 times, you see a disproportionate uplift on the entirety of your earnings.Multiples are a function of forward growth. If there is growth on the horizon, people are always willing to capitalize todays earnings at a higher multiple because of that dynamic. Thats the way cyclical investing works. If you are earning 10 today and that represents a cyclical low and you expect to earn 13 at some point in the future, whether its next year or the year after, people are willing to capitalize that 10 at a higher multiple.The opposite is also true. If you get that 13 tomorrow and people see 10 on the horizon, theyre probably going to de-rate that stock give it a lower multiple. Solely from a financial stock analyst point of view, you dont actually want there to be a V-shaped recovery because it risks de-rating the stocks more quickly than you otherwise would. My hope is that we have a recovery and its a slow and steady recovery so that the cycle can be more elongated.Higher risk premium for transport playersAnother issue for transport stocks, regardless of mode, involves risk. The risk of the coronavirus was not factored into the equation previously due to a failure of imagination, but we cant unremember it now, so it will be factored in going forward.Its such a great point and Ive been thinking about this a lot. I dont think a lot of people talk about the price of risk.When you think about the valuation of a company, the cost of capital is extremely important as a reference point. When we talk about a company creating value over time, we are talking about generating returns above the cost of capital.One of the biggest components of calculating your weighted average cost of capital WACC is the price of risk your equity risk premium. I think its totally logical and fair to say that the equity risk premium has structurally risen in the post-pandemic world. Thats very clear.But if your risk premium goes up 100 basis points because of coronavirus and at the same time your interest rates go down 100 basis points, that doesnt impact your cost of capital.Also, when you look at the levers that drive returns above the weighted average cost of capital, its obviously your margins, and the CAPEX intensity dictates how much of your margins is dropped down to free cash flow. Ultimately all youre doing is discounting your free cash flow. When you look at that, you find the biggest lever to that number is growth and as I mentioned before, one of the impacts of the coronavirus is that growth expectations for next year have actually improved.What youre saying is that the outbreak will cause the equity risk premium to rise but the effect on WACC would be offset by lower interest rates and at the same time, growth prospects would increase off a lower base, so net-net, a positive?Correct.Ocean shipping stock valuationsId like to bring this theoretical discussion over to concrete examples. Lets talk about ocean shipping stocks, starting with tanker stocks, because theres a lot of talk now that theyre not being properly priced in the market in terms of the fundamental value of the tanker companies. In fact, you recently wrote an open letter to the management of EuronavNYSE: EURN addressing the stock-valuation issue.The letter I wrote definitely came from a place of some frustration, but what I was really trying to get across was the question of: Why should a shipping company be public? The answer is that the public equity markets can be a very efficient avenue for capital if the value of your stock is above net asset value NAV; the market-adjusted value of the fleet and other assets minus debt and other liabilities. If your stock is above your NAV, that provides you a perpetual capital base to fund accretive growth. I believe the entire 100 reason for a shipping company to be public is to manage the business so that one day its stock is valued above NAV.But what if youre a well-managed company with an incredibly responsible capital allocation and youve done everything right, like Euronav has, and the market is still treating your stock like crap? What benefit are you getting from being public? It costs 5 million to 10 million a year for these companies to be public. Thats money going right out the door.So, you pay out dividends and what youre trying to do with dividends is decouple the stock price from NAV and value the company based on the dividend. Theres no other reason to give dividends. 