Our 16th update on the Coronavirus and its continuing impact on the logistics sector here in the UK and across the world. In general news the UK is now facing a split on how it is dealing with the outbreak between England, Scotland, Northern Island and Wales. In England from Monday life continues to get closer to normal with more restrictions lifted, people allowed to meet each other in limited numbers and more general shops / services being allowed to reopen from the middle of the month. However in Wales they are taking a much more cautious view and now date has yet been announced. In Northern Ireland certain venues are being allowed to open, including furniture shops and car showrooms, while outdoor weddings will be allowed to take place but with a restricted number of guests allowed. Overall in June the economy should begin to recover slightly however everybody will be watching to see if there is any sudden second wave of infections. South Korea has closed over 250 schools which had just reopened the previous day due to a sudden spike of infections. South Korea had the virus under control, but has had several new outbreaks, often linked to one place or an individual who has become infected and then spread it further.
Airfreight once again is still in high demand to move PPE equipment from China to Europe however it looks like June will see lower freight rates with rates ex-Shanghai to European and USA destinations dropping over 10% on average this week. Currently airfreight belly capacity has increased by over 15% on the previous week as more passenger freighters come on line. With the talk of more passenger services being allowed to operate in June and July capacity will continue to increase. However as the world enters an economic depression caused by the virus and lock downs all around the world, it may result in by August or September being too much capacity available as the demand for non-medical goods is not there, or shippers and buyers preferring to take the cheaper seafreight route even though transit times are much longer, in order to save costs in an increasing competitive market.
Ocean freight is also still seeing the effects. Shipping lines are still having issues with shippers and importers not notifying them of delays to shipments, or outright cancellations which is causing difficulties in managing supply chains with cargoes not being delivered to ports for sailings and vessels leaving empty. There is still reports being printed saying that there will be no bounce back for container freight in 2020 with there being an overall decline of around 10%. While shipping lines have temporary cut sailings and has allowed them to lay up vessels, these vessels still cost money while they are mothballed and if the shipping lines cannot put them back to work, or dispose of them economically, it is going to be be a significant cost for them to support. Smaller container vessel operators are also feeling the pain. The Loadstar reports in an article how MPC container ships which operates in the container feeder service is experience a severe downturn due to the the Coronavirus. The part of its fleet which operates in the spot broker market has now over 160 feeder vessels lying idle around the world. This again again highlights the severe disruption the virus is having and indicates how much cargo demand has fallen over the past few months.
The middle east is often a turbulent region, however the countries which make up this area also have a long and rich trading history.The countries often included in this description are Bahrain, Iraq, Iran, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, and Yemen. Currently the UK exports significant amounts to this region from machinery to humanitarian goods and is anticipating increasing this further after Brexit in December 2020. However both Syria and Yemen have been engaging in serious internal wars for several years making shipping into them difficult. Iraq is still very unstable in certain regions and Iran has significant economic and trade sanctions in place.
At AJF we offer export ocean freight services to most of these locations either directly or through our transshipment service in Jebel Ali, UAE. We can help with potential exporters with the action they need to take when looking at these markets. AJF can advise who they need to speak to help with documention and export licences.
AJF logistics services can handle full container load shipments
For consignments which require a shipper’s own container rather than using shipping lines container. We can either collect a shipper sourced container or AJF can arrange the supply of a fully plated container. Once the container reaches its delivery destination AJF can arrange the disposal of the container or the shipper can purchase it directly from us. We move a lot of humanitarian and medical equipment in shipper’s own containers to several countries in this region. It is particularly useful for clients who are transporting goods to unstable regions where the goods may need to be stored for a long period of time until required. It is also suitable where the end user want to use the container as a distribution centre, or plan to repurpose the container for another use, such as an on site office.
For smaller consignments of pallets, drums and machinery we operate weekly Less then Container (LCL) services from the UK. As with some of our full load services we tranship some of the consignments in Jebel Ali, UAE. At our agents warehousing we consolidate these cargoes with other ones for shipping on to their final destinations. We do offer the service of re-working the goods in Jebel Ali, including repacking and re-labelling the goods. We can also combine shipments who arrive from several different locations around the world in to one consignment for onward shipping to a final destination in the region.
We offer limited airfreight shipments to this region for urgent goods such as perishables or very high value cargoes. Most of our airfreight services go to Dubai, Airport for onward distribution. Shippers should be aware the Coronavirus going around the world is reducing the number of flights and this is threatening to make these services much more expensive with limited space over the next few months.