CUSTOMER ADVISORY: COVID-19
March 5th 2020
Dear Valued Customer,
We would like to update you on the market situation and the current status of Trade Link’s operations in China and South Korea. Our local teams and agent offices in China & South Korea, in most cases, remain open and fully operational. We will continue to keep you informed of any changes to the current situation and we thank you for your business and continued support.
Overview
The Covid-19 outbreak was first reported from Wuhan, China, on 31 December 2019. According to the latest figures from the World Health Organisation, global cases have reached more than 95,200. Reports of how the Covid-19 outbreak is disrupting supply chains and manufacturing operations around the world are increasing daily. The crisis is fast evolving and the peak of its impact is expected to hit in March as production ramps up.
Air Impact
The International Air Transport Association (IATA) is predicting the financial impact of the coronavirus on the global air transport industry could be over $100 billion. “Many airlines are cutting capacity and taking emergency measures to reduce costs” says Alexandre de Juniac, IATA’s Director General and CEO.
Maritime Impact
The International Chamber of Shipping, the global shipping body representing 80% of the world’s merchant fleet, estimates that the virus is costing the industry $350m a week in lost revenues, with more than 350 000 containers removed from global trade.
Sources including Lloyd’s Loading List are reporting that shippers and cargo owners in the US and Europe are facing a shortage of empty containers as a result of carriers’ blanking sailings because of lower volumes emanating from China. As a result of the blank sailings, non-vessel owning operators have been forced to hold empty equipment longer than usual, incurring more detention and demurrage charges.
Trade Link Response
Against this backdrop, Trade Link is working closely with our teams in China and South Korea to monitor the evolving situation and plan for logistics contingencies. We are working closely with our customers, especially importers heavily reliant on Chinese manufacturing, to support the functioning of their supply chains. We are implementing logistic contingencies as necessary, including shifting to alternative suppliers and markets, pulling from alternative inventories and just-in-time logistics replenishment.
Trade Link Regional Updates:
China
Our agency teams and offices remain operational and open across most of the region. Tianjin and Wuhan continue to remain closed in compliance with local authorities and containment regulations. Trade Link have shipped protective masks and monitoring equipment from Canada to partner offices and suppliers across the region. Employees, if not in the office are working from home to maintain operations. We monitor operations daily with our local teams.
We observe that production is resuming across the region, with the exception of Wuhan/Hubei Province. More port workers and truck drivers are steadily returning to their posts, and cargo flow is easing up at the major ports.
Air Freight – While capacity is still heavily impacted out of China, all airports are operating normally, with the exception of Wuhan and were all flights are suspended until the end of March. It is expected that space will get tighter towards end of March as factories production is ramping up. We stand ready to provide air charter solutions to secure the capacity required by our customers for shipments between China & North America and China & Europe.
Sea Freight –Most Chinese ports are operating normally. The port of Wuhan is also gradually resuming operations.
Rail & Road – Market demand on rail solutions is exceeding capacity and train services have largely resumed operation across key stations, including Xiamen, Chengdu, Chongqing, Xian, Hefei, Suzhou, Shenyang, Changchun, Zhengzhou. Trucking capacity has been impacted due to the lack of drivers. Against the limited resource, we already see price increases from 20% to double the price on local market tariffs. Inter-cities and inter-provinces trucking are challenging due to heavy regulations on road, resulting in delays.
South Korea
Trade Link’s local teams and agents offices in South Korea remain fully operational.
Air Freight – Intra-Asian flag carriers have suspended passenger flights to and from South Korea, resulting in more than 40% of the capacity being reduced.
Sea Freight – There are no major impacts except blank sailing.
Rail & Road – There are no major issues and only minor delays for pick-up and delivery due to road restrictions and preventive measures,
Europe
Our operations in Italy and across Europe continue to run as normal.
We will continue to provide updates as the situation unfolds. If you have any questions, please contact your Trade Link account manager, or send an email to: load@tradelinkinternational.ca
Thank you for your continued support and understanding,
