The Norman Global Logistics team in Asia has updated their comprehensive China supply chain report, detailing factory status, port operations, regional situation, rail and air freight services.

Improved situation:
We are summarizing the current status to protect your supply chain.

The virus has changed our daily routines, and unfortunately, it has affected the supply chain and logistics industry hard since the end of January. As the situation develops in overseas locations in the EU and the US as well, the speed of the recovery is getting more uncertain.

Businesses and transportation continue to return to China. In general, the container ports and railways have resumed work. The operating capacity of trucks and terminals is at estimated 90% of the levels before the outbreak.

NGL offices:
All NGL offices in China have resumed full operations.

Factory production:
Except for Hubei province, other areas continued to return to operations. Many cities are back to near-normal activities. Several factories still have reduced production capacity due to a shortage of raw material and labour.

The larger-scale factories did return faster and to a greater extent than the SME during this process. We expect the deliveries from China factories will remain low during all of March.

As China factories resume operations, we observe specific issues in the wake of Covid-19:
– Unstable supply of raw material
– Lack of skilled workers
– Logistic issues
– Increased scrutiny from regulatory agencies
– Increased risk of fraud

Factories: Current status

Tianjin 90% of factories returned to operations this week
Several factories operate with reduced capacity because some workers are not back yet
Dalian 95% of factories return to operations this week
Several factories operate with reduced capacity because some workers are not back yet
Fuzhou 90% of factories return to operations this week
Several factories operate with reduced capacity because some workers are not back yet
Xiamen 95-98% of factories return to operation this week
Several factories operate with reduced capacity because some workers are not back yet
Guangzhou 95% of factories resumed operations
Shenzhen Several factories operate with reduced capacity because some workers are not back yet
Hong Kong Operating
Shanghai Shanghai – Basically all factories started 95%
Zhejiang – Estimated 90-95% of factories started.
Ningbo 90% of factories resumed production
Majority of workers returned; some factories still operate with reduced workforce
Qingdao 95% of factories returned to operations
Several factories operate with reduced capacity because some workers are not back yet

Status:
The situations for trucking capacity and road closures have significantly improved. Domestic road transportation is currently running near normal again.

Ocean shipping:
February volumes dropped hard, US imports from China fell 22% and reached the lowest levels in 4 years. Looking forward, we expect tight space as factories ramping up production while carriers will cancel sailings. Ocean carriers “blank” 58 sailings from Asia to Europe and the same number on Asia to the USA during Q1.

The main obstacle is the lack of empty containers in the in-demand areas. Carriers are now repositioning empty equipment from surplus regions. The imbalance is an effect of the stop of the flow in the supply chain. Ports in the US and the EU are lacking equipment following the low volumes from Asia, while ports in Asia have a vast surplus. The shortage will continue into May.

Region: Current status

Hong Kong Ocean Carriers January 29 Operation as normal.
Trucker January 29 Operation as normal.
Road Closures January 29 Operation as normal.
Warehouse January 29 Operation as normal.
Customs January 29 Operation as normal.
Shanghai Ocean Carriers February 3 Operation as normal. Blank sailings announced.
Trucker March 3 Much improved situation. 95-100% of truckers are back to service. Some limitation for out of city truckers.
Road Closures March 3 Highways and roads are open, Zhejiang highway is also open.
Warehouse February 3 Operation as normal.
China Customs February 3 Operation as normal.
Ningbo Ocean Carriers February 17 Blank sailing announced.
Trucker March 3 70-80% of trucking capacity returned.
Road Closures March 3 Highways open in Zhejiang. Wenzhou/Taizhou are also open for local trucking; truckers need “green passport”.
Warehouse February 17 Operation as normal, advance appointment is required.
China Customs February 3 Operation as normal.
Qingdao Ocean Carriers February 3 Operation as normal. Blank sailing announced.
Trucker February 3 95% of service resumed. Pickup within city is normal, out-of-city pick-up and truckers are improving, limited capacity.
Road Closures March 3 Highways open. Local cities keep some restriction for out-of-town vehicles and drivers.
Warehouse February 3 Operation as normal.
China Customs February 3 Operation as normal.
Tianjin Ocean Carriers February 3 Blank Sailings announced.
Trucker February 3 95% of service resumed. Pickup within city is normal, out-of-city pick-up and truckers are improving, limited capacity.
Road Closures March 3 Highways open. Local cities keep some restriction for out-of-town vehicles and drivers.
Warehouse February 3 Operation as normal.
China Customs February 3 Operation as normal.
Dalian Ocean Carriers February 3 Blank sailings announced.
Trucker February 3 95% of service resumed. Pickup within city is normal, out-of-city pick-up and truckers are improving, limited capacity.
Road Closures March 3 Highways open. Local cities keep some restriction for out-of-town vehicles and drivers.
Warehouse February 3 Operation as normal. In advance appointment is required.
China Customs February 3 Operation as normal.
Fuzhou Ocean Carriers February 3 Operation as normal. Blank sailings announced.
Trucker  March 3 Keep improving, 95% of the drivers are back to service. Pickup within city is normal.
Road Closures March 3 Highways are open.
Warehouse  February 10 Operation as normal, pre-noted before delivery.
China Customs February 3 Operation as normal.
Xiamen Ocean Carriers February 3 Operation as normal. Blank sailings announced.
Trucker March 3 Keep improving, 95% of the drivers are back to service. Pickup within city is normal.
Road Closures March 3 Highways are open.
Warehouse February 10 Advance booking required, some with limited opening hours.
China Customs February 3 Operation as normal.
Guangzhou

&

Shenzhen

Ocean Carriers February 10 Operation as normal.
Trucker March 3 Back to normal, some limitations for out of city trucks.
Road Closures March 3 95% open and back to normal.
Warehouse February 10 Operations resumed.
Customs February 10 Operation as normal.

*Warehouse service: advance appointment is required in Chongqing and Nanjing.

Airfreight

Further travel restrictions introduced globally have resulted in massive cancelations of passenger flights. The capacity for air cargo is more impacted than any other mode of transport. More than 40 airlines suspended passenger flights to/from China, with more than 25,000 flights/week cancelled. Demand out of Asia and China is very high with soaring rates.

With the increased market demand, carriers gradually return freighter capacity to the market. Even with an increase in freighter capacity, it will not in near time make up for the lost “belly-hold capacity.” Several airlines now started to use passenger aircraft to transport cargo only, following restrictions for people to travel. Demand for cargo is very high, and airlines such as Cathay Pacific, Korean Air, Qantas, and Delta Cargo have announced such actions.

Operator Operate Reduced Operation Cancelled Operation
AA X

China & Hong Kong, until 24 April

AC X

BJS/PVG/HKG

AF X
AY X

Flights to China Feb 6 – Mar 28

BA X

Flights to China until further notice

CX X

50% reduced capacity to China

DL X

All flights to China, to end of April

EK X

HKG

X

Freighter PVG and CAN

PVG passenger flights
EY  X
JT X
LH X

HKG

X

Freighters reduced ops BJS / PVG

X

All China passenger flight to 28 March

QR X

Freighters reduced

 X

All passenger flights to China

RS X
SK X

Flights to PVG, BJS to 29 March

VS         X

HKG

X

Shanghai, until 28 March

UA  X

BJS, PVG, CTU, HKG to 28 April

*All Airlines are subject to change without prior notice or warning.

Rail Freight

Except for the Wuhan region, pickup operations and roads are open and working at normal or “near to normal” levels.
Rail service has proven to be the more reliable option for international transports during the whole situation. Demand is high and keeps rising, and shippers should make timely bookings. The first half of April already has high volumes of space booked. Many shipments typically transported by ocean and air are now being switched to rail.

Region Resume Status
Wuhan Until further notice Service suspension
Zhengzhou Operating at reduced capacity Resumed, with reduced capacity
Xian Operation as normal Resumed service
Hefei Operation as normal Resumed service
Chongqing Operation as normal Resumed service
Xiamen Operation as normal Resumed service
Chengdu Operation as normal Resumed service

Sea – Air

Sea-Air via Dubai is also getting effected and getting limited operations and increased pricing. Connect with your local NGL team for the latest update of possible options.

Communication & information

Communicate with all actors in your supply chain to learn the risk in various regions. Check purchase orders to find delays in due time to apply corrective actions if needed. NGL has online tools to improve visibility. Keep updated of government rules announced.

TIPS FOR YOUR CHINA SUPPLY CHAIN PLANNING

  • Check orders planned for shipping
  • Identify and inform your forwarder and factory for urgent cargoes
  • Consider alternate shipping modes, as an example, to transfer shipments from Ocean to Rail, either full or partial loads
  • Expect further blank sailings and reduced air capacity as the effect of factories closed for an extended period
  • Once factories are back in operation, the market is likely to receive peak demand with space shortage
  • Communicate with your forwarder & factory of your requirements
  • Inform your customers of the situation and of possible delays in the supply chain & deliveries

Talk to your local NGL contact or email to HongKong@normanglobal.com for planning and arrangements.
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