• 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 .