Coronavirus – Current Situation And Impact On Shipping Schedules

Posted on Feb 13

02/13/2020

The spread of the virus was seen as stabilized over the last few days, but a sudden spike in reported infections and casualties in China increased the numbers previously published dramatically.

Our partners in China report that many factories have reopened after the expended holidays but are unable to operate at normal capacity as many workers have not been able to return from their hometowns due to travel restrictions and quarantine regulations, the current factory output is estimated to be only at about 20%.

The restrictions also impact cargo flow, while full truck- and container-loads are mostly possible to move, consolidated trucks are not operating in most locations so the movement of smaller shipments from vendor location to seaports and airports is rather difficult, slow and expensive.

Most international passenger air service has been suspended, which has a big impact on available belly space. Most freighter services will return to regular schedules as next week, especially due to the large demand of inbound space for medical equipment into China.

Ocean carriers are still blanking sailings due to low demand, so far over 100 loops ex China are impacted. Trucking companies, carrier operation centers and port terminals are also suffering from staff limitations due to the already mentioned travel restrictions. CFS stations at the port are mostly open, and due to the low demand space is manageable, although some cargo is being rolled due to the limited space availability caused by blanked sailings on certain routes.

The industry worries that the current situation is the “calm before the storm” and that a high influx of cargo after production has increased might lead to space shortages as carriers might not be able to return to regular capacity levels in time, it is at this point hard to predict how the situation will develop as it is unclear if the spread of the virus can be controlled enough to “return to normal” and when that would happen.

Our Airfreight and Ocean freight Teams are monitoring all shipments and will contact you as soon as possible should your cargo be in any way affected by flight /sailing cancellations or delays.

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02/10/2020

China marks the official date for work-resumption in most provinces today, with authorities requiring applications for approval to resume work. In some locations factories further delay reopening which will delay the resumption of normal production schedules further.

Terminal operations in Chinese ports run normally, while many off-dock depots are closed and expected to reopen in the coming days. Barge service operate normally except to/from Wuhan where backlogs have to be resolved.

Carriers still announce additional blanked sailings due to the low demand for cargo space caused by the extended holiday period.

Airfreight volumes are low, and cancelled passenger and cargo flights put a strain on available space.

Our Airfreight and Ocean freight Teams are monitoring all shipments and will contact you as soon as possible should your cargo be in any way affected by flight /sailing cancellations or delays.

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02/06/2020

Several ocean carriers have postponed the return of their staff to the office further to 02/17/20 based on recommendations by Chinese authorities to delay work resumption to contain the spread of the virus.

Port operations continue as usual, barge service at Wuhan in Hebei province has partially resumed but operations is still limited.

Lower overall demand will possibly lead to more blanked sailings in the next few weeks.

Analysts predict that the current situation will reduce container volumes at Chinese ports by over 6 million TEUs, this volume reduction is expected to reduce the growth of global container throughput by 0.7% in 2020. Today, the Port of Los Angeles saw a 5.4% year-over-year decrease in January total throughput, with imports decreasing by 3.5% against January 2019.

As a result of the extended shutdown of Chinese factories manufacturing in other parts of Asia, especially in the automotive sector, is being heavily impacted, with some car manufacturers in China and South Korea already stopping car production.

The situation for airfreight is mainly unchanged, airlines are reviewing flight schedules and are still pulling capacity by cancelling flights.

Our Airfreight and Ocean freight Teams are monitoring all shipments and will contact you as soon as possible should your cargo be in any way affected by flight /sailing cancellations or delays.

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02/04/2020

In most provinces in the eastern half of China work will still not resume until 02/10/20, in Hubei Province that included Wuhan not until 02/14/20.

After the end of Chinese New Year festivities ocean freight demand does not fully return for cargo ex-Asia until early March, the latest developments will result in a longer than usual recovery time. This might lead carriers to blank even more sailings over the next few weeks to react to the low demand scenario.

Some ocean carriers are slowly restarting barge operations from Wuhan.

The US Coast Guard put new US port arrival procedures in place, incoming vessels that have called Chinese ports (excluding Hong Kong and Macau) must now report on the crew’s health to the US Coast Guard Captain of the Port. Vessels will be allowed to berth normally if no sick crew members are on board. Similar reporting requirements are in place for ports in Canada.

In the airfreight sector flight cancellations due to low demand and travel restrictions will impact uplift volumes over the next few weeks, if not months, as airlines are continuing to review and adjust their flight schedules for passenger and cargo flights.

Our Airfreight and Ocean freight Teams are monitoring all shipments and will contact you immediately should your cargo be in any way affected by flight /sailing cancellations or delays.

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02/03/2020

In response to reduced shipping demand from China due to the extended Chinese New Year Holiday period ocean carriers are now starting to blank additional sailings that usually would have taken place after workers in China returned to their factories and restart production.

On Sunday, sweeping travel restriction were implemented by the US, and airlines are further reduce the number of flights to and from Asia due to these restrictions and a general downturn in demand, with Delta Airlines and American Airlines announcing flight suspensions up to the end of April, and flight cancellations are now also expected for all-cargo operations.

Our Airfreight and Ocean freight Teams are monitoring all shipments and will contact you immediately should your cargo be in any way affected by flight /sailing cancellations or delays.

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01/30/2020

The spread of the virus to other countries now impacts air and ocean transportation of both passengers and cargo.

Several airlines including Delta Airlines, United Airlines, Air Canada, KLM, Lufthansa and British Airways, have cancelled flights to and from China, as passenger demand has decreased. These measures will impact air cargo booked on passenger flights that now has to be accommodated otherwise.

Ocean carriers have not taken drastic measures at this point as they are in a blank sailing environment due to the Chinese New Year Holiday period anyway. The measures taken by the Chinese government are impacting ocean carriers’ staff to return to work in areas that are subject to the extended holiday but carriers have staff on hand or remotely working at offices, terminals, depots and other facilities.

At this point no sailing restrictions have been announced except for ports in Hubei province, including Wuhan. Most carriers suspended bookings from/to ports in Hubei province and are evaluating the handling of already booked shipments based on the developing situation.

Our Airfreight and Ocean freight Teams are monitoring all shipments and will contact you immediately should your cargo be in any way affected by flight /sailing cancellations or delays.

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01/28/20

The deadly Coronavirus that has claimed over 80 lives (officially) and infected over 2,700 people in China, and first cases have now been detected in the U.S., France, Canada, Australia, Singapore, Malaysia, Thailand, Japan, Vietnam, South Korea and Nepal.

Several cities in China, including Wuhan where the outbreak started, are quarantined and the Chinese government has taken unprecedented steps to get the situation under control and prevent further spreading of the virus.

The most draconian measure taken is the extension the traditional Chinese New Year holiday by 3 days until February 2, which the cities of Shanghai and Ningbo where the extension will last even longer until February 9.

These measures will also extend the time Chinese factories will sit idle during the holiday period; many companies are now expected to not reopen until February 10.

This will have a large impact on supply chains that rely heavily on the quarantined areas for manufacturing and shipping (Shanghai and Ningbo are of course two of the largest and busiest ports in China).

Ocean carriers are currently monitoring the situation and it can be expected that they will adjust their shipping schedules due to the extended work stoppage period that will result in reduced production activity.

We are in contact with our carriers and will provide updates on sailing schedules and possible blanked sailing as soon as they become available to us.
Your Account Team will provide updates on any individual shipments that might be affected by changes in shipping schedules.

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