Coronavirus Logistics Update 7 (COVID-19)

This the next weekly update on the impact of Coronavirus on Logistics and Supply Chains. Some improving news with China officially appearing in control of the virus. This now means ports are operating more and more as usual. Safmarine and Maersk have now lifted any congestion surcharges for reefer containers to main Chinese ports. However in the rest of the world the virus is still increasing dramatically. As of today the Prime Minister Boris Johnson has declared he has the virus and is now self-isolating. The rest of the UK is in semi-lock down, with everybody apart from those in essential services asked to stay at home. All logistics operators are now classified as key workers in the Coronavirus government plan. This was welcomed generally by the freight industry as battle to keep supply chains working especially those in the food sector.

Most of the larger UK logistics firms have now put in place systems so their employee’s can work at home and continue to manage the day to day operations with just management a skeleton staff at companies offices. Companies which handle documentation such as POD’s are looking at ways of mitigating the issue of having to get signatures on paperwork to try and reduce the risk of the virus being transferred this way. Customers are being asked that to allow the driver to sign the paperwork on site. Ports in the UK remain fully operational as of Friday. However the coronavirus bill which was passed into law this week does give various government officials the powers to shutdown ports completely and have vessels diverted elsewhere. While at the moment there is no plans to do this, if it did happen to one of the larger ports than it would have a massive effect on the entire logistics industry.

Several planned strikes by critical logistic sector workers have been called off in light of the effects of the Coronavirus. This week the National Union of Port Workers who planned a strike in Lisbon has now been called off. This will ensure the port operations continue to run as smoothly as possible in this time of crisis.

Airfreight demand has increased dramatically on some routes with unprecedented demand for full air cargo charters. Though it is expected this may be short lived as now all of Europe and the USA going into shutdown which will reduce demand drastically. With this demand normally airfreight rates are soaring as the reduction in passenger traffic has meant large reductions in schedule flights and this in turn as resulted in a large decrease in bellyhold cargo space. A lot of airlines are cancelling long term contracts as a result of this as they have no capacity on some routes now suspended, which is leaving shippers chasing around for alternatives.

IATA estimates that airlines may risk loosing almost 252 Billion Dollars in revenues. Emirates Airlines initially had said it was cutting all services from the 25th March. Now they are going to operate a much reduced service on limited routes however this will mean a large capacity drop for the airline.

Several European transport firms have began to park up part of their fleet due to falling demand for non food products with factories across the region shutdown and supply chains come to a halt. Ferry companies operating between UK and the EU have decreased passenger services but some are now increasing freight services as there is a increased demand for perishable goods.