The Chinese authorities attempt to restrict the spread of the Coronavirus is creating a back-log of unshipped cargo in closed factories, while sea and air capacity is being depleted.
Our personnel across China and Hong Kong are working remotely to maintain service levels, even as the situation deteriorates.
We are expecting the situation to change. If the factory shutdown is extended for a further week, the backlog of cargo will double.
The holiday extensions currently announced:
14th Feb – Hu Bei Province
10th Feb – Shanghai, Chongqing, Zhe Jiang, Jiang Su, Guang Dong, Fu jian
3rd Feb – All other provinces
In the weeks following any Chinese New Year, we would expect ocean freight rates to stay elevated and capacity tight, because of the annual blanked sailings imposed.
162k TEU’s have been withdrawn this year, significantly reducing volume. The Coronavirus will exacerbate this already stretched situation, as the lines add the growing backlog of shipments that didn’t get moved before CNY – a potentially massive increase , which will inevitably push sea freight rates up, resulting in delays and rollovers.
If you have shipments pending in China, we would urge you to contact us without delay, so we can explore the best options to repatriate your cargo before capacity starts to bite and rates harden.
British Airways has already suspended direct flights from the UK, while United Airlines, Air Canada have taken similar action and further airlines have confirmed they will be reducing services from and to China.
Freighter aircraft operations are largely unaffected, but it is the reduction in belly-hold air cargo capacity that is the biggest issue for most shippers, because it significantly reduces volume, at a time when it is most needed.
If the current situation continues to deteriorate we would expect more cancelled flights and sailings, reducing volume even further and increasing the likelihood of freight rate inflation.
It is also likely that port and airport congestion will develop, which will impact cargo collections from China ports. Inland freight movements are also likely to be severely affected, particularly in regions and cities that are locked down.
This is an evolving situation that we are monitoring closely and will update our advice, as developments occur. Return to our site or follow our social feeds to stay up to date.