Market Advisory Update – China Coronavirus

As we continue to monitor and receive information from our partners and vendors in China, note the following news that has been updated today.

We have been advised that road closures not only between cities but within cities are becoming more prevalent. See the two pictures below that show roads being blocked by the authorities.

The barricades are not only to prevent the movement of commercial vehicles such as trucks, but are increasingly encompassing pickup trucks and other passenger vehicles as well. This is not just a case of “trucks can’t move”, increasingly it’s a case of “vehicles can’t move.”

Maersk has announced that their offices in China will be closed through the end of February with employees being allowed to work from home.

Hamburg Süd’s offices are closed through February 17th.

Access to container yards is growing more difficult between blockades and factory closures.

With regards to the availability of air freight, the significant reduction in passenger services to and from mainland China to either the US or other transshipment airports has reduced available lift. It is believed that when factories reopen, the only air cargo options that will be available will be with cargo aircraft until passenger services are restarted.

Transparently, we anticipate that the resumption of business in China and the limited options available for departing cargo will create severe pressure on pricing in a more acute than usual supply and demand environment.

We continue to encourage importers and planners to speak with their contacts in China who are being advised by the local and national governments what the policies will be for re-opening and who know the location and availability of their workers.