Customer Advisory: Covid-19 Developments
March 27th 2020
Dear Valued Customer,
The coronavirus situation is continually and rapidly evolving and we encourage you to keep up to date with guidance from the Canadian Government and the Public Health Agency of Canada (PHAC).
As we continue to monitor developments of the Covid-19 pandemic we would like to update you on general market conditions and the status of Trade Link’s operations in key regions.
Currently, the coronavirus COVID-19 is affecting 199 countries and territories around the world. As coronavirus (COVID-19) continues to extend its global reach, specific measures taken by countries to contain the spread are having a direct impact on freight capacities, rates and transit times. This has been more evident with global air freight following the suspension of passenger flights (and bellyhold cargo capacity), resulting in big increases in freight rates as the pandemic advances from Asia to the west.
In Europe, despite EU guidelines on ‘green lanes’ at borders to ensure the continuous flow of goods, logistics operators are encountering significant border delays, which is inevitably disrupting supply chains.
Our operations in Canada and elsewhere continue to operate as normal despite the logistics challenges and rapidly evolving situation.
We are monitoring daily the impact Covid-19 is having on customer supply chains and the wider forwarding and logistics sector and you can find all our briefings and news articles available here:
Trade Link Regional Updates:
Canada / US
The Canada-U.S. border remains closed to all non-essential travel while leaving it open for the movement of freight in trucks.
The rise of Covid-19 cases in Canada, US and EU that have given way to extreme travel restrictions, resulting in limited available capacity in the market due to the heavy reduction of passenger flights and cancellation of some freighters.
Airlines, including Air Canada, have slashed passenger flights. Air Canada is laying off more than 5,000 flight attendants as the country’s largest airline cuts routes amid plunging demand – reports USA Today.
Air Canada says it will suspend most of its international and U.S. flights by March 31. The carrier says employees will be returned to active duty status once flights resume. The report goes on to highlight that United Airlines announced it would reduce international flights by 95% for April due to the government’s coronavirus-induced travel advisories, while American Airlines reduced its international flights by 75%.
US and Canadian seaports continue with protocols to ensure the health, safety and well-being of employees while maintaining the essential functions of the Port.
With significant capacity reductions in air and ocean and we are working closely with our partners and carriers to mitigate supply chain impacts and implement contingency solutions.
With the situation in China stabilising and a decrease in reported new COVID-19 cases, efforts have now turned to reviving the economy. The low figures have led Chinese authorities to lift stringent travel restrictions in Hubei, effectively freeing millions of people from two months of extraordinary lockdown, reports The Guardian.
Recovery efforts include keeping cross-border logistic flows open. China manufacturing is back up and running, albeit we are seeing reports of some shortage of raw materials that is impacting production output. For importers trying to source goods from China, storage and transport issues, particularly bonded storage, is challenging – since space and demand is impacting global supply chains.
Air Freight –
We observe air freight prices continuing to rise and many carriers have not got available space or they can’t be sure when the space will open. Trade Link continue to work closely with our local China teams and carrier partners to monitor and mitigate capacity and price impacts. Options include a Charter service, routing Qingdao, China (TAO), Inchon, Korea (ICN) to Toronto, Canada (YYZ) with service frequency, Tuesday, Wednesday, Thursday, Friday, Saturday and transit time around 5-7 days.
Sea Freight –
Most, if not all, Chinese ports are operating normally. Terminal, depot and CFS operations in China are almost back to normal. There are blank sailings and the capacity is limited.
Rail & Road –
Except for the Hubei Province, most of the trucking services have recovered. Currently the trucking capacity on the market is less than adequate and we see trucking cost increase. This trend is expected to prevail as activity resumes in China. Scheduled rail services between China and Europe are still running with the exceptions of Wuhan that is expected to resume at the end of March.
The European Commission has already issued guidelines for countries to set up so-called “green lanes” for land (road and rail), sea and air transport, to keep essential transport moving. The move came after many Member States announced restrictions to transport – a full list by country is available here. This list is updated regularly, as information becomes available.
The European Rail Freight Association (ERFA) welcomed the decision, noting for rail freight, this means that the Green Lanes and the entirety of the TEN-T Core Network must continue to be accessible 24/7 as well as there being a strong level of capacity management coordination between Member States.
Air freight to/from Europe is increasingly challenging, with the majority of carriers cutting capacity. Europe/USA belly capacity has dropped by more than 80%. Alternative transport plans based on charters and freighters solutions are being implemented across the industry to ensure continuity of service.
European ports and rail are operating despite challenging conditions. Trade Link’s European operations continue to operate.
Other helpful updates and insights:
- Round-up from Europe regarding road transport movements and logistics: COVID-19 – here
- Know the difference: Self-monitoring, self-isolation, and isolation for COVID-19 – here
- EDC Economics’ Global Economic Outlook—Spring 2020 sees a short, sharp recession in the first half of this year that will have businesses the world over in need of large amounts of financial assistance – here
We will continue to provide updates as the situation unfolds. If you have any question, please contact your Trade Link account manager, or send an e-mail to: email@example.com
Thank you for your continued support,