• March 6, 2020 in Latest News, Uncategorized

    Coronavirus (COVID-19) Update – 06th March

    Coronavirus (COVID-19) Update – 06th March

     

    Interesting insights from China 
    Our sources have provided us with some information on what is happening on the ground, with indications trade and freight movements are slowly recovering.

    Reports are indicating 70-90% of factories have re-opened, depending on province, and are gradually ramping up production.

     

    A quick breakdown is as follows:

    • Most of the eastern provinces such as Zhejiang, JiangSu, Fujian, Guangdong, Shanghai, Shangdong are back to work. However due to travel restrictions, most of the manufacturers are still not operating normally at this stage due to staff shortages. Some of the provinces have started using charter flights to get workers back to work. Henan province has announced 16 March as the return to work date.
    • Most nationally owned manufacturers are at 80% productivity and logistics companies back to running around 95% (not full productivity at this stage).
    • Zhejiang 99% of companies and manufacturers are back to work. However, the productivity is around 50%, will expect 80% by mid / late March
    • Guangdong 99% companies and manufacturers are back to work. Productivity for many companies is around 50%, will expect 80% by late March. However the top 300 companies are running at 91% productivity. The province is using high speed trains and charter flights to get workers back from inner Chinese provinces 
    • Furniture industry in Guangdong province is now back to 80% productivity and the car parts industry in Shangdong province has been fully operational since 15/02/2020 under Government guide.
    • The textile industry in Zhejiang province is now back to 80% productivity since 29/02/2020.          
    • In Jiangsu province 78.7% companies and factories are back to work, worker numbers are at approx. 6.25 million which is 76% of the normal requirement.
    • Measures are also being taken to ensure that any factory / business that is re-opening has met all requirements for cleaning of their facility and equipment. 
    • Chinese government encouraging use of trains to carry containers rather than rely on trucks between cities and provinces
    • Most provinces have reduced their control restriction from level one to level two, this means other provinces’ workers if healthy are able to travel into most of the provinces.
    • It is also understood that there are reasonable stocks of export goods in storage that should be able to enter the supply chain immediately those places open back up.

    It is expected the Chinese government will provide assistance to ensure a full return to economic stability is achieved as quickly as possible.

    This may include financial support and/or promotion of internal markets. That said there is still real concern for the short term, and maybe some companies may not survive.

     

    OCEANFREIGHT:
    We have continued to note a significant number of blank sailings impacting scheduling & movement of available shipments from China. This is also affecting various port rotations on routes calling ports in other countries along the way to Australia.
    Blank sailings for direct voyages are creating a peak demand for continuing services, an outcome that was not anticipated for this time of year and before the coronavirus outbreak.

    Also affected is the through movement of the sailings which would continue onto New Zealand, creating delays & tightening of capacity on this trade-lane.

     

    As a result of the change in supply and demand of shipping services, it is noted that some shipping lines have this month introduced a Peak Season Surcharge of up to USD $100 per container to all cargo moving from Australia (generally to all regions except USA and Europe).

    There have also been reports of some Shipping Lines looking at introducing an “Equipment Imbalance Surcharge” (EIS) on lanes where there is a critical container shortage, due to high volumes of containers stuck in China following the extended Chinese New Year shutdown. Indications have been up to USD 1,000 for Reefer containers & USD 400 for general containers.

     

    AIRFREIGHT:
    With passenger flights in/out of China being suspended, approx. 85% of the air cargo capacity has been wiped out.

    Airfreight market rates to all routes have been affected, and we have seen pricing increases based on capacity on various trade-lanes.

     

     

    Northern Italy / South Korea

    With increased outbreaks becoming more widespread across the globe in particular Northern Italy, South Korea and Iran.

    The various shipping lines advise that at present there are no issues impacting vessel or aircraft movements of cargo in these areas at this point in time.

     

    It is worth noting that any vessels arriving into an Australian Port that report ill persons will be required to undergo health inspections before being allowed to have dealings with local Ports, which may cause delays to local berthing.

    ABF and Biosecurity officers remain responsible for border clearance processes. Vessels that report ill persons will undergo a human health inspection by a Biosecurity Officer on arrival in Australia, and before the vessel is granted pratique.

    Crew who have left or transited through Italy or the Republic of Korea on or after 2100 AEDST 5th March 2020, may be subject to enhanced health screening measures on arrival into Port.

     

     

    See current live global reported cases updates at: Coronavirus COVID-19 Global Cases by Johns Hopkins CSSE

     

    To stay abreast of all developments and general information concerning the Novel Coronavirus we suggest members maintain a watching brief on the Department of Health website 

     

    We will continue to monitor issues surrounding the coronavirus situation and keep you updated.

    Should there be any further information required, please do not hesitate to contact us on 1300 814 743, or e-mail .

  • February 11, 2020 in Latest News, Uncategorized

    Coronavirus Update – 11th February

    Coronavirus Update – 11th February

    Following up on our previous notices, as a result of the Coronavirus outbreak emanating from Wuhan in Hubei Provence, Chinese authorities had extended the Chinese New Year Holiday through 10th February for the majority locations in the hope of containing the situation.

    Whilst there may be directives being issued regarding work nationally, it seems many provinces / cities / corporations are erring on the side of caution and suggesting that a slower return to work may be appropriate given the scope of the virus and the concern in the community.

    All this is due to the continued efforts to limit the spread of the Coronavirus as there are a number of uncertainties, and related restrictions in each province and across China that will become clearer in the coming days.

     

    In general, many provinces/cities are being advised to manage the return to work in the best interest of their employees, and it is worth noting that some businesses still remain closed, often with work from home arrangements in place. 

    This however does not assist with the start of production and/or physical movement of cargoes destined for Australia or to receiving into China.

    Our contacts have indicated that the “return to work” for Hubei province is now scheduled for 17th February, with a number of business also advising their expected re-start date of 17th February as well.

    The feeling within the community is that any return to work and full capacity will be a slow build and the lower volumes of cargo moving may extend into early / mid-March. 

    It is estimated a national employee downtime of about 20 percent, and this will be higher the closer the factory is to Hubei.

     

    Factories are expected to return to a minimum of 80 percent capacity by 24th February – provided their immediate work force, suppliers, and distributors are not located in or in close proximity to Hubei Province.

    However, currently, a growing number of businesses have suspended their production and shipping operations, due to halts in business operation and curbs on transportation, which have weighed heavily on the retail, manufacturing, and trading sectors.

    In response to these challenges, China is now offering more support to businesses and bolstering its online administrative channels to establish a more coordinated link throughout its industry chains.

     

    The focus is first on the supply of essential products, and then on the resumption of work for existing enterprises to resume full production. In this article, we provide a more holistic look at some of the measures the government has put forward, just last week, to assist businesses and reduce the loss suffered by them where possible.

     

    Some links / facts that members / industry may find of interest into the broader issues of the virus and the impacts are shown below;

    • Schools are not going back till end of February
    • Corporations are encouraging anyone with a laptop / remote access, to work from home

    AUD – Australian Dollar

    OFX this morning advised that “The Australian dollar sank to its lowest level in over a decade on Monday (10th Feb), touching 0.6656, as demand for risk and the economic exposure to China sapped investor demand. Sustained fears the coronavirus will hamper the global economic recovery and dampen Chinese GDP escalated through trade on Monday as the number of confirmed cases pushed through 40,000 and the World Health Organisation issued an ominous warning.”

     

    This is a definitely a continually evolving situation, and we will continue to monitor the situation and update on this medium.

    In the interim, if we can provide any further information, please do not hesitate to contact us on 1300 814 743, or e-mail

  • January 29, 2020 in Latest News, Uncategorized

    Extension of the Chinese Spring Festival Holiday

    China’s State Council officially announced on Monday that the Lunar New Year / Spring Festival holiday will be extended to 2nd February across the country.

    The holiday week was originally from January 24th to 30th January. (The official notification can be accessed here).

    However, Shanghai has announced that all enterprises will remain closed till 9th February. (See official notification from the Shanghai municipal government here)

    Similarly, Zhejiang Province announced it is delaying return to work and school to 9th February. (See official announcement here)

    Guangdong Province also announced Tuesday evening that it will delay resumption of work and school to after 9th February and February 17th-24th, respectively. (See official announcement here)

    The move to extend the New Year break has been expected as government and healthcare authorities double down on efforts to contain the Novel Coronavirus outbreak by restricting public movement and large gatherings.

     

    There have been cases reported in all 60 provinces in China and around the world, with 106 people reported to have died as of this morning, and close to 4,200 reported cases.

     

    Hence, our China and Hong Kong offices will resume normal operation as below.

    Office

    Resume Operation Date

    Chongqing

    3 Feb 2020 Mon

    Dalian

    3 Feb 2020 Mon

    Fuzhou

    3 Feb 2020 Mon

    Hong Kong

    3 Feb 2020 Mon (for HK Public Holiday is 29 Jan 2020)

    Ningbo

    10 Feb 2020 Mon

    Nanjing

    10 Feb 2020 Mon

    Qingdao

    3 Feb 2020 Mon

    Shanghai

    10 Feb 2020 Mon

    Shenzhen

    10 Feb 2020 Mon

    Tianjin

    3 Feb 2020 Mon

    Wuhan

    Work at home until further notice from local Government

    Xiamen

    3 Feb 2020 Mon

    Zhongshan

    10 Feb 2020 Mon

     

    There have already been immediate global impacts, which includes general falls in the United States and Australian stock markets.

    However, there are a number of possible impacts on trade and the industry which implements that trade.

     

    Some examples of the impact of the current “Coronavirus” can be summarised as follows:

    • There are likely to be additional biosecurity measures at the airports adding to travel times which will apply to all travellers. Crew on ships originating in China or passing through affected areas may be confined to quarters. Those biosecurity measures may then extend to goods originating from China if it believes that those goods may somehow have been infected.
    • The extension to the “Lunar New Year” will further extend the “low season” conditions in sea freight and may well further delay shipments of goods to Australia. That may affect the manufacturing industry needing Chinese inputs to manufacture or affect those awaiting ordered finished products, especially consumers or retailers.
    • There is bound to be a significant impact on travel between Australia and China. Not only will this affect tourism and the provision of education for Chinese students in Australia. The likely reduction in air services may also have an unexpected effect on Airfreight shipping. It is less known that during the cancellation of air services during an Icelandic volcanic event years ago, the shipping trade was held up as original bills of lading, which usually were moved by air services were delayed at point of origin. Of course, with the reliance on such original bills of lading, containers and other goods could not be unloaded.
    • The most immediate impact is in Wuhan, the capital of the Hubei province which could amplify the wider effect in China as it is one of the country’s main manufacturing, transport and logistics centres. The effect on the wider economy could be very damaging with production and supply chains being affected throughout China and therefore throughout the world.
    • The extent of the wider effect is currently hard to calculate.  While there is a larger world economy and more personal international travel than at the time of SARS, it appears that medical intervention here and overseas may be quicker and more sophisticated. However, unlike 2003, the services economy is now a major part of the Chinese and Hong Kong economies, so the inability to move people will have a bigger impact than before.

     

     Australian suppliers to Chinese customers may find demand for their goods and services reduced by the combined effect of the “phase one agreement” with the US and reduced domestic demand in China.

     

    We expect to start to see adverse impacts in the near future, and wish to warn our clients, customers and others in the supply chain, that things may take time to recover, and some immediate impacts will be shipments arriving into Australia without prior documentation or Telex Releases/Original Bill of Ladings being received to date.

     

    We will be monitoring and notifying any customers regarding delays this may cause to vessels, and/or container retrievals/deliveries at each location, which will impact shipment deliveries.

    Should there be any further information required, please do not hesitate to contact us on 1300 814 743, or e-mail .