Due to the urgency with which suppliers are trying to move cargo, all-cargo air charters are on the rise and capacity on cargo airlines is at a minimum with fluctuating rates. We are being told by airlines to book now to get in line and we will find out the actual rate for the shipment when the flight time gets closer.
European road update:
Italy is showing signs of distress; the availability of trucks nationwide is very low and they have closed parts of the border with Austria. Additionally, there are staffed border checks and many carriers have expressed a disinclination to take loads to Italy. At the present time, we are able to cover loads destined for consignees in Italy.
Korean air update:
We received the following update from our South Korean partners this morning:
“More than half of newly confirmed cases (of Coronavirus) are linked to a branch of a religious sect in the southeastern city of Daegu. Of the 256 new cases, 182 are in Daegu, 300 kilometers southeast of Seoul, and 49 are in the neighboring North Gyeongsang Province.
Other major provinces and cities have also reported some infections with Seoul reporting another six cases, the Korea Centers for Disease Control and Prevention said in a statement.
We have received the following airline updates:
- Delta Airlines: Incheon to Detroit, Atlanta and Seattle – reduction of flights but nothing yet fixed. Incheon to Minneapolis – Suspended
- American Airlines: No determination yet
- Korean Airlines: San Francisco and Honolulu flights suspended 1.March through 30.April.
- Hawaiian Airlines: Flights suspended from 1.March through 30.April.
The Korean market’s options are far more limited than China’s and with a severe reduction in passenger options all that will remain are transshipment options which are also constrained by flight operations in neighboring countries such as Japan, Taiwan, China and Hong Kong.
This will have a direct impact on space and rates and we encourage shippers to communicate their needs as early as possible so that we can work first to secure space and then confront whatever the rate issues are on a shipment by shipment basis.
Asian seafreight update:
We discussed the problem of empty containers not being where they needed to be for loading exports from Asia once factories begin working at full capacity because of blanked sailings and other factors.
There are now rumblings of a Container Imbalance Surcharge which will be used to offset the cost of repositioning equipment where it needs to be. The specific amounts and lanes have not yet been fixed, but we are monitoring and will share this information when we know more.
COVID-19 Update: February 27, 2020
As the stories in the news turn from the impact on supply chains to the spread of the virus to multiple countries around the world, we wanted to keep the focus on the situation in China for manufacturing and shipping and provide an update from our partners in country.
We received the following update today:
“HUBEI Province is in lock down mode, where coronavirus outbreak is most severe in China. As Jingzhou City is located in HUBEI Province. Suppliers in Jingzhou City must be closed. Under traffic control, only government vehicles and vehicles carrying necessities and medical suppliers & equipment may pass through.
As majority of factory workers are from HUBEI and they are not allowed to leave HUBEI Province, all reopened factories in other parts of China are under-staffed.”
The figures below were collected across all of China’s provinces and reflect the percentage of companies reopened.
In Hubei province, the government has decreed that all companies with the exception to health and medical industry and necessary products and service suppliers must remain closed until the
end of the day on March 10, 2020. The Hubei provincial government has also forbidden non-crisis management vehicles and private cars on roads.
In the United States, we have seen the flight suspensions by carriers such as American, United and Delta. There is a story that Spring Airlines in China is offering flights between Shanghai and Chongqing – three hours apart – for a little over $4.00. An estimated 10,000 daily flights have been cancelled in February.
Carriers have continued to blank sailings into March and the lack of sailings will mean that when factories reopen, the concern over the number of available empty containers for eastbound loading will be a factor as well.
Next week, TOC Logistics representatives will be in attendance at the annual Transpacific Maritime Conference sponsored by the Journal of Commerce. We will be listening very closely to carrier representatives and economists on what they forecast will happen in the coming weeks ahead.
We received the following update from our Korean partners this morning:
“More than half of newly confirmed cases (of Coronavirus) are linked to a branch of a religious sect in the southeastern city of Daegu. Of the 256 new cases, 182 are in Daegu, 300 kilometers southeast of Seoul, and 49 are in the neighboring North Gyeongsang Province. Other major provinces and cities have also reported some infections with Seoul reporting another six cases, the Korea Centers for Disease Control and Prevention said in a statement.
”As you can see, both area city of “Daegu” & “North Gyeongsang Province” are widely infected by virus but it’s no problem for everybody to go back to/from both areas but it’s not recommended by government. Please be advised that below supplier is located in both area among supplier in KR as follows:
(1) ICN / DTW, ATL, SEA : Reduction of Flights bud Not fixed
(2) ICN / MSP: STOP SERVICE
(3) Effective Date : From 1st, MAR to 30th, APR 2020
– HA : Cancel Flight Schedule
– AA : Not Determine but will be updated
– KE : SFO DIRECT & HNL Flight Cancelled –
This means we can’t offer regular twice per month services for a while because the carrier doesn’t provide rate & space so bookings are very irregular in our market. We will need to evaluate your quotes on a case by case for a while so another update will be announced as soon possible.
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