Customer Advisory Covid-19: We continue to monitor service plans and contingencies

May 8th 2020

Dear Valued Customer,

As the evolving Covid-19 pandemic presents capacity and volume challenges, Trade Link regional teams are closely monitoring service plans and alternative routings.

The impact of the Covid-19 pandemic on global trade and manufacturing supply chains continues to reverberate around the world.   Multinational companies initially faced a supply shock as production and manufacturing sites ground to a halt, only to be followed by a demand shock as more and more countries introduced lockdown measures to contain the spread.

As the speed and scale of the Covid-19 crisis escalates, Trade Link continue to monitor service plans and contingencies across our operations in key regions.   Some immediate industry-wide challenges we face include:

  • Global air cargo capacity is 29% lower compared to last year, as a result of passenger aircraft being grounded.
  • Air Freight rates continue to soar because of high demand for critical shipments of PPE (personal protective equipment).
  • Blank sailings have removed 25% capacity on the transpacific, 30% from Asia-Europe and 59% from Asia-east coast South America.
  • Europe-Asia ocean rates hit new heights as blank sailings cause exporters to scramble for space.
  • New regulations and border restrictions as countries adapt their lockdown strategies.
  • Across all key regions: Americas, Asia and Europe – exports and imports are experiencing double-digit contraction on prior year.

Managing Supply Chain Risk & Disruption

Despite the uncertain economic and trade conditions, Trade Link remain fully staffed and are working round the clock with our international teams to keep supply chains stocked and moving.

Our Top 5 actions for the organisation and global teams in the short-term are:

  1. Engaging with customers – in service continuity and contingency planning amid ongoing cuts to ocean and air capacity.
  2. Align IT systems and support to evolving work requirements – as our workforce and business operations evolve more and more to an online environment, our priority is to ensure system stability, network robustness and data security across our global network.
  3. Keeping our people safe – supporting our global teams to work remotely and ensuring their work environment adheres to local health and safety guidelines and protocols.
  4. Increased flexibility, collaboration, and control – leveraging our organisation flat management structure and competitive advantage to move quickly and decisively in executing strategies and contingency solutions.
  5. Staying connected and informed – closely monitoring all media and global reports to gather facts and insights on the current Covid-19 situation to support customer planning and decision making.

Ultimately our primary focus is to support our customers and ensure continuity of service across our regions.  We would like to update you on general market conditions and the status of Trade Link’s operations in key regions. 

Trade Link Regional Updates:

Canada / U.S.

Canada and U.S. operations are fully operational and compliant with social distancing and government guidelines.  Our telephone lines are working as normal and remain the same, as are our email and online shipment tracking systems.

Blank sailings and reduction in air capacity has prompted a change to our operational procedures.  To compensate for the lack of volume and finding space, especially to the Far East, shipping lead-time is approximately 3 weeks out and so we are asking customers to advise well in advance about any upcoming orders.

Meanwhile the International Air Transport Association (IATA) has called on the Canadian government to provide urgent financial relief to airlines as they struggle to survive the devastating impact of the Covid-19 crisis.   IATA estimates that revenues generated by airlines in the Canadian market will fall by C$14.6 billion (43.2%), putting nearly 250,000 Canadian jobs at risk and C$25.4 billion of Canada’s GDP, which is generated by aviation directly as well as by aviation-related tourism.

US and Canadian seaports continue to operate 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 likely to continue well into Q2, we will continue to work closely with our customers and carrier partners to mitigate supply chain impacts and disruptive events.


China’s trade activity surged briefly after factories reopened, but that activity is now beginning to stagnate even after lockdown measures were eased in Wuhan, The World Economic Forum reported yesterday.   The return-to-work rate in China has crept up as more companies resume production, but the domestic landscape remains drastically altered.  Domestic and international trade transactions are reported as suffering a week-on-week drop of 56% beginning mid-February.

Air Freight – 

Airlines have been continuing to respond to urgent demand for the transport of PPE (personal protective equipment) by adding extra cargo capacity but it has not contained rate increases out of China and Hong Kong.  TAC Index figures show that last week average air cargo rates from Shanghai to North America breached the $10 per kg  – a record for the index which began in March 2016 – source Air Cargo News.

Capacity from the Asia Pacific region to North America was last week 4% lower than a year ago, while at the end of March capacity was 19% down on a year earlier.  Capacity from Asia Pacific to Europe is now 20% down on a year ago, compared with 30% at the end of March.

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 

Shipments out of China are likely to have fallen 15.7% in April from a year earlier, according to a median estimate from the survey of 28 economists reports the New York Times.  Imports, meanwhile, are expected to have shrunk 11.2% from a year earlier, the sharpest drop since July 2016.

Container-ship capacity out of Asia to the U.S. remains challenging and expected to fall sharply, both this month and next month as carriers move to protect rate levels by controlling capacity supply.  According to eeSea data, 51 of 243 scheduled North American arrivals from Asia have been cancelled this month; 44 of 236 next month; and 23 of 240 in July.  Measured in twenty-foot-equivalent units (TEU), not number of sailings, headhaul capacity to North America from Asia is down 21% this month compared to the original (pro forma) schedules, 19% next month and 7% in July – source: Freight Waves.

In order to minimize the impact to our customers’ supply chains and provide predictability, Trade Link are closely monitoring carrier service plans and alternative routings.

Rail & Road –

Most of the trucking services have recovered and operating well and capacity is no longer an issue.   Scheduled rail services between China and Europe hit a monthly record high in April as it plays a bigger role in maintaining the global supply chain, with China State Railway Group reporting a 46 percent year-on-year growth on prior year.


After weeks of staying at home, parts of Europe are tentatively setting out plans to ease lockdowns imposed to combat the spread of Covid-19.  Against this backdrop, the European Union is bracing itself for a “recession of historic proportions” this year, with the coronavirus pandemic expected to cause a 7.4 per cent drop in economic output – source Euro News.

The pandemic has hurt consumer spending, industrial output, investment, international trade, capital flows and supply chains.  It has also thrown millions of people out of their jobs.  The unemployment rate across the 27-nation EU is forecast to rise from 6.7 per cent in 2019 to 9 per cent in 2020 but then fall to around 8 per cent in 2021, according to the Commission.

Meanwhile airfreight to/from Europe continues to be challenging, with the majority of carriers cutting capacity.  Europe/USA belly capacity has dropped by more than 80%.  Alternative transport plan based on charters and freighters solutions are being implemented across the industry to ensure continuity of service.

European ports and rail are operating with minimal congestion. Land transport is maintained, but subject to disruptions and slowdowns due to increased border controls and safety measures.  Note that the European Commission continues to work to the designation of Green Lanes at the borders to keep goods moving.

Trade Link’s European operations continue to operate in full despite the challenges and evolving situation.

We will continue to provide updates as the situation unfolds.  If you require more information on any of the topics raised, please contact us.

Thank you for your continued support,

Your Trade Link Team

2020-05-08T07:54:10-04:00May 8th, 2020|Global Trade, Logistics Expertise, Supply Chain Management|