Corona Virus and the Latest Global Situation

Attention: Shipping Manager

Disruption of Air Freight:

As you are all well aware of the Corona Virus Pandemic and its global implications, the impact on shipping industry, especially on air freight, has been significant. Throughout the world, supply chains have been disrupted and there is a sense of uncertainty as to when and how this crisis will come to its end. Scientists are working round the clock to develop a vaccine in order to minimize and contain the spread of this virus but until its done, almost every affected country have imposed some sorts of restrictions/measures of social distancing to flatten the virus transmission curve.

One of the measures which is common across all affected countries is the cancellation/severe restrictions on air travel which has resulted in airlines facing massive losses and grounding their fleet of passenger planes. In Australia, Qantas, Jetstar and Virgin Australia have cancelled almost all of their international flights. Globally, Emirates have cancelled their flights to more than 100 destinations worldwide and the number keeps rising. Other airlines have also followed suit and have cancelled most of their passenger flights.

Since most of the normal air cargo moves in passenger planes, this has severely limited the capacity for movement of goods by air at a cheaper rate. The space is very limited and the rates have gone up significantly across the globe. Airlines have stopped offering longer validities and the rates are changing almost every hour. Freighter aircrafts still continue to operate but they are normally a lot more expensive as compared to moving cargo by passenger planes and given the fact that situation with COVID-19 is changing so rapidly, these aren’t even very stable. We have seen a significant surge in air freight pricing from USA, Europe, China, India and almost every other affected country.

China/Japan FCL Space Issues:

As the situation is moving toward normalcy in China and Japan, many factories and offices have either completely resumed their operations or are slowly getting back to full capacity (With the exception of Wuhan). We have seen an increase in demand for export cargo from these countries and recently had space issues for cargo coming to Australia. If you have cargo coming out of North East Asia, its advisable to plan for it in advance to avoid any disappointment with space unavailability.

Situation in Europe:

Our Partner from Germany has advised that a lot of companies all over Europe are closed or their employees are working from home which is impacting the export production. Additionally, Most of the borders are now closed/under extra scrutiny and a lot of cargo from Eastern European countries, which moves via Germany/Netherlands is impacted. This is because the drivers from Eastern countries don’t want to travel there and the costs of trucking within Europe is likely to increase further. We have already seen a significant rise in Transhipment rates and General rate Increases from Europe to Australia by majority of shipping lines. Rates aren’t guaranteed/ stable from these locations, given the rapidly changing conditions. Some shipping lines are only quoting on a case by case basis as the vessels are overbooked. In case of pre-booking which is later on reduced/cancelled/rolled, shipping lines have started charging additional fees regardless of when the cancellation occurs.

For UK to Australia trade route, our partner has advised that there is currently no space for transhipment vessels till May.

Brisbane Port Arrival – Vessels should be at sea for 14 days:

Queensland Maritime Safety Authority has implemented a 14 days at sea restriction on all vessels calling Brisbane port. Vessels coming from any country can’t enter the port unless 14 days have passed since the vessel departed any country outside Australia. NSW already have this restriction for vessels coming from China. Some shipping lines have slightly adjusted their schedules to comply with this requirement.

NZ Moving towards Lockdown:

We have heard from our partner that the NZ government is now in the process of closing down every business/service for four weeks. They are currently working from home. According to the latest news, supermarkets, doctors, pharmacies and other essential services will still be available.

Dieterle & Victory will keep you updated as more information becomes available.