Coronavirus: Supply chain update for 5th February

These updates are a blend of information from supply chain and news sources, together with local insights from partners and carrier notices

Virus latest

Worldwide confirmed cases – 24,642 across 28 countries, with China accounting for 24,627, or 99% of cases.
Number of deaths have reached 493, with 2 deaths recorded outside of China.

Supply chain

Factories and suppliers in mainland China are closed until 10th February, with the Lunar New Year holiday extended until 13th February in Hubei province, including Wuhan, and 17th February in Wenzhou, Zhejiang Province.

Many offices in Hong Kong have confirmed the extension of office closures until 10th February 2020.

Economics

Economic forecasts are predicting a significant impact on the Chinese economy, with further reverberations at a global level. 
Although the Chinese economy is more robust and diversified than it was at the time of the SARS outbreak in 2003, there is an assumption that reduced consumer spending will contribute to a broader economic slowdown. 

Further afield, businesses exporting to, and importing from, China are likely to be disrupted.

Transport

Airlines and air freight
– Some 30 airlines have now stopped services to parts of China, with 25,000 fewer flights than a fortnight ago.

– Further airlines have announced the suspension of services to more destinations on mainland China and the periods of suspension will be extended depending on local requirements.

– Full Cargo flights appear to be relatively unaffected at present – For cancelled cargo services where shipments have already been booked, the majority of carriers’ cargo reservations teams are liaising with customers directly to advise on alternative measures.

– DHL Global Logistics have advised that air freight shipments to mainland China are suspended unless consignees confirm cargo acceptance and arrange customs clearance.

– Carriers are advising that they will not accept responsibility for additional charges incurred as a result of cargo arriving in China during the extended holiday period.

Ocean carrier updates
– No ocean freight bookings are being accepted to or from Wuhan, but bookings for other destinations are being taken as normal; shipments currently heading to Wuhan are likely to be diverted to other ports.

– Freight rates and transit times are expected to be impacted for both inbound and outbound China shipments.

– Most shipping lines are offering extended detention and demurrage free time, generally until 9th February, but customers are advised to check with their shippers and local agents to confirm local arrangements

– Following the current drop in demand, carriers predict the eventual increase in demand will lead to capacity challenges; all shippers are advised to review forecasts and liaise with carriers to identify solutions, including alternative routing, pricing structures, etc.

– Carriers are implementing local solutions to maintain services, including home working and additional online functionalities to reduce the need for local travel.

– We would urge customers to liaise with their suppliers and local agents in affected areas, to ensure that documentation is produced in a timely manner; this will help reduce the risk of delays and consequent additional charges.

Ports updates
– Vessel loading and discharge across the Greater China area are operating as normal; local government directives apply for extended holidays and business opening.

– Further to additional blank sailings announced by shipping lines, major shipping yards are declaring force majeure due to reduced operations at Chinese ports.

Metro Shipping will continue to liaise with carriers and partners to keep you informed with further developments.  If you would like any further information, or wish to highlight any specific shipments please call your usual Metro contact for guidance and the latest updates.

We can foresee that once infection rates are brought under control and manufacturing activities are resumed, there will be a significant spike in demand for sea and air freight movements.  We will continue to keep you advised as further information becomes available.