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Newsflash - Coronavirus (COVID-19) - Industry Update - 14.4.2020

14/4/2020

 

 

COVID-19 - Industry Update - 14.4.2020

 

Regional Updates

China

• Imported or related COVID-19 cases are almost 1000, local non symptom cases are 1033 as at April 7,12:00 am. Chinese government is trying to control this second wave at this stage. However, Wuhan and Hubei province will be released from lockdown effective April,8.
• Chinese People Daily, April 7, confirmed that key ports, such as Shanghai, Qingdao, Tianjin (Xingang), Ningbo (Zhoushan) and Shenzhen, are back to 95% to 100% productivity compared to same period last year. Tianjin port has improved its frozen container storage capability.
• Many local Chinese news outlets confirm, April 5, that 30%-50% of orders have been cancelled. CCTV news indicated, Chinese Government is trying to help these companies and manufacturers, however, the final policy is yet to be released.
• Chinese news sources suggest that the 2M Alliance (Maersk & MSC) will suspend approx. 20% of scheduled vessels on certain lanes, however there is an expectation that the market will rebound in the October - December period
• Sea-Intelligence Maritime Consulting, April 3, confirm that the reliability rate for the shipping lines dropped to 65.1% globally in February and is expected to be worse into the 2nd quarter.
• Maersk Line has offered container storage services in the following Chinese ports (Dalian, Tianjin, Qingdao, Shanghai, Ningbo, Xiamen and Yantian). Clients can store loaded containers at these ports in Maersk authorised depots. However, this service does not cover Dangerous Goods or Frozen containers. MSC have also advised an SOT (Suspension of Transit) service globally, refer the above link for more information.
• Container advisory Sea Intelligence reported there have been 212 vessels cancelled globally as at April 6 and they are expecting the whole industry will lose over 23 billion in 2020. Lars Jensen, Chief Executive of Copenhagen based SeaIntelligence Consulting stated in an article in the The Wall Street Journal ”The virus in China alone led to more than 120 blank sailings. The pandemic spread is likely to lead to substantially more blank sailings than this,” and “If the 37% reduction is an indication of a global demand shortfall, this means all carriers are facing mortal risks.”

Other Areas

• North America -  the main ports are operating albeit with reduced hours  / days as is dictated by vessel volumes. Priority is being given to "essential goods" in the main medical supplies. "Shipping lines have canceled 20 voyages to the Port of Oakland, one of the 10 busiest container seaports in the U.S., between February and April 2020, the port informed."
• New Zealand -  New Zealand continues on its "level 4" lockdown however whilst essential goods are being moved to end consignees, non-essential cargo is currently being stored at transport company yards or alternate sites pending the "lockdown" period ceasing. One other issue is that some businesses are finding delays of 3-4 days when trying to obtain a slot to collect cargo at Auckland terminal. Thankfully a number of shipping lines have agreed to requests for relief of demurrage / detention  
• South Africa - Lockdown March 27 till April 16 - strict controls in place, only allowed to leave home for medical care / food shopping / medicine etc. - supply chains involved in providing essential goods to essential services
• Europe - not dissimilar to the USA, Ports operational in most countries but processing is slow. Italy most impacted as reduced working hours compounding the issue. Italy and Spain also have bans on non-essential operations so these, eg; factories, warehouses etc, are closed.
• United Kingdom - Lockdown March 23 and will be assessed in 3 weeks - all non essential shops close - supply chain still operating but a number of businesses are working from home which is impacting cargo delivery

 

Airfreight

The Government's plan to assist industry, particularly traders in the perishable goods and agriculture areas, is starting to take shape - the RFO has been released with a closing date of April 8 and the government has advised they expect decisions on who is appointed to manage the tasks to be finalised by April 10.

FTA / APSA welcomes this support for our agriculture industry at this time especially on the back of the drought and recent bushfires.