This is the thirteenth update on the continuing effects the Coronavirus is having on the logistics and supply chain sectors. In general news the USA is beginning to reopen up even while it is still showing increasing infection and death rate.  This is reflected in the financial markets, despite the terrible job loss news out of the USA and continuing tensions with China, the DOW, S&P and Nasdaq are now powering ahead refusing to pay attention to this bad news. It is shrugging off any fear about long term effects of all these shutdowns on the world’s economy. The Nasdaq may even break the 10000 barrier with the next week. This rally appears to have caught many market commentators by surprise with initially everyone saying the initial rally off the previous lows would not last. If the markets are right then it will mean the logistics sector will be back in demand at least by some sectors. However it is still unlikely that the Oil and Gas sector is going to recover much over the next few months with oil still below 30USD a barrel and long term contract prices are currently not forecasting much of an increase in demand.

Returning to the UK and despite the newspapers and other media outlets trying to imply the lock down in the UK is going to be all gone by soon, the reality is the UK government is only expecting to announce a very slight easement of restrictions on Sunday. This may include allowing garden centres to reopen and people to use parks to relax in. Scotland has decided to continue all its measures unchanged for another 3 weeks showing that this crisis is still far from over. Vaccine trials have begun with estimations of a workable one being available anytime from September this year to September 2021.

HackerNews had a thread this week on sellers looking for alternative e-commerce markets to Amazon. The thread discussed how sellers where getting disenfranchised with one of the worlds market and looking for alternatives such as Shopify. Several website designers noted that they were busier than ever with requests for setting up individual operated e-commence sites. For the logistics sector this means there will be more potential clients out there looking for fulfilment services, from devaning containers to reverse logistics. This may reverse some of the losses over the past decade to Amazon. Though with the current market share Amazon has is unlikely to be concerned at the moment by this development.

Ocean freight services are still seeing serious imbalances on availability of equipment and space on some routes from Europe to Asia and the MiddleEast. As a result shipping lines are coming up with new emergency surcharges which they can add to existing rates this includes an ESS surcharge which is short for Emergency Space Surcharge. This does not mean shippers will be guaranteed space, just they will be guaranteed the extra charge.  The continuing in balance in trade is also seeing Peak Season Charges being introduced. Overall exporting from the UK is in general going to be more expensive for the next few months.

Lloyds has reported that more and more vessels are now choosing to transit via the Africa Cape rather than via the Suez Cannel due to the very low oil bunker prices meaning it is becoming more cost effective. The one downside of this is the increased levels of pollution from these vessels burning more fuel due to taking a longer route. In the UK the expected shortage of container storage space has not occurred with currently there being no real issues for shippers looking for off site storage of incoming containers.

Once again airfreight is still in high demand for shipping from China to to the rest of the world. Medical and other related Covid-19 supplies leading the demand.  Some airfreight industry reports are now showing that the decline in airfreight space has finally reached a bottom and is beginning to show signs of increasing in the 1st week of May. However rates are still much higher than previous years even though oil is lower. Some shipments are still attracting additional cargo handling charges when they arrive at European Airports. May will be an interesting month overall to see how trends are going in this sector.

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

• 20ft and 40ft HC Shipping Line Equipment
• Flat Racks and Open Tops
• 20ft and 40ft HC Shippers Own Equipment

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.

The Coronavirus is continuing to cause issues to global supply chains with many of the large manufactures around the world issuing warnings of potential hit to full year profits.  This has highlighted how important China is in supply chains across the planet today. Many companies have urgently started to try and move manufacturing to other countries including  Vietnam and India. Few of these countries have the capacity to available to meet the sudden demand, and even ones which can it is going to be many weeks before these products are able to get the end consumer.

In the UK one online furniture supplier warns that while they have sufficient stock due to the delays in factories restarting up they are facing the a break in their supply chain. They rely on a constant supply of containers from China manufacturers. They have additionally stock to cover the Chinese new year shutdown, however they expect to run out of the most popular items within the next few weeks. If they have to stop selling certain items not only does it mean a loss of sales, but also a drop off in Amazon, Ebay and Google rankings. As a result once the supply chain out of China is reestablished, it will take time to get sales back to previous levels. The owner does not expect to have to lay off any staff at the moment this may become required if the crisis continues.

Transport operators are not fairing much better. Both shipping lines and airlines (cargo and passenger) have lost large amounts of money over the past few weeks. Many shipping lines have added blank sailings into their schedules to prevent their vessels getting delay at Chinese ports. Airlines have cancelled virtually all services and are not accepting bookings till the end of March for many Chinese destinations. Additionally with the virus spreading to other countries many Airlines are reducing their services to these areas. Easyjet which is low cost operator in the UK, is taking drastic action to reduce it costs in the face of falling passenger numbers, these include pay freezes, reduction of administration costs and offering staff unpaid leave.

Despite all the bad news, for China the official line is amount of new cases being reported is dropping and if news reports are accurate then virus now seems to be effecting more people outside of China. This is reflected in the current port operations in the Port of Ningbo, China. This port has over 24000 registered truck drivers, at the height of the crisis it had less than a thousand actually working. This figure has now reason to over 7000 by the end of last weekend. This means container through put has gone from virtually nothing to 13000 twenty foot equivalent (TEU) units being moved per day at the start of the week. Other Chinese ports are beginning to clear through their container backlogs.

Shippers need to be aware that as factories begin to return to full operation and there is a rush to get goods to the ports, space will become a premium on the vessels and as result rates will be expected to rise and containers will sit on the quay longer than normal while awaiting a vessel with space. Price issues and space availability is effecting airfreight imports and exports as there is considerable reduction on available flights currently. Booking space as early as possible is currently the best recommend action for shippers.

Our warehousing services are available to all our clients who need to rework their products, have them stored for later distribution, or quality inspected. Where containers have been handball loaded at the manufacture we can destuff the container, repack on pallets, shrink-wrap and then export to the final delivery destination.

Our transshipping services allow importers and exporters to change containers, packaging marks and shipping documentation where the shipper may not want the receiver to know where the goods original origin was. This service is particularly useful where the shipper is acting as an agent only and never handles the goods directly themselves and wants to avoid the buyer contacting the supplier directly. It is is also useful for companies shipping to politically sensitive regions where there may be restrictions on them.

The consolidation service allows clients who source from various factories which are exported from various ports in the far east and have a central location to consolidate these shipments before transporting them to their final destination in the Middle East, Africa, or Europe. We take either Full Container Loads or part loads, store them and once we have sufficient goods in store we then load them into one container, arrange the new paperwork and then export them. The consolidation service can be used for multiple shipments from Europe  to go to a Far East country or Australia.

Cargo Splitting and Distribution is the reverse to the consolidation service where a client has one supplier but multiple receiving destinations. We take into our warehousing the shipment which can consist of one or multiple containers. The shipment is then devanned from the container. Following the orders given from the client the cargo is split and packed onto pallets, relabelled where required and then exported to each destination. This allows the client to export in bulk from the supplier at more cost effective rate and if required make if more difficult for them to know the final destination.

The order fulfilment services are suitable for clients with international supply chains which need a location with good links to all worldwide locations. We can pick orders to a clients specific requirements and they can then be airfreighted out immediately to be with the end customer within 24hrs or  to a clients distribution centre for them to manage the final delivery. This allows stock to be held in one central location which allow clients to be able to manage seasonal demands or environment where there may be a sudden demand for one product type in multiple locations.

This is further update on the continuing impact of the COVID-19 virus on logistics and supply chain services in China. Currently the rate of infections being reported has slowed down in China. However there are new cases being reported other countries around the world which did not have them before which indicates the virus still has not been full contained. The overall situation is still very fluid.

Within China transport links within provinces are gradually returning to normal, however there are still restrictions on trucks moving across province’s borders.  Chinese authorities are giving permission to more manufactures to reopen factories and restart production, however some factories are still very cautious about opening as they are worried when workers start returning to the factory sites it may start off another outbreak of the virus and the factory being shutdown again. Additionally some workers are still reluctant to return from fear of getting infected creating a labour shortage in some regions and causing production output to be reduced.

It has been reported that to date the world’s biggest shipping line Maersk has cancelled 50 sailings from the China mainland to worldwide destinations. With ocean freight shipping suffering greatly with blank sailings and inability to get containers loaded, inter continental rail freight shipments from central and western china have seen a rapid increase in demand. The increased demand has resulted in a shortage of available capacity on most routes to Europe. Containers are now having to be stored awaiting the next available train with spare capacity. This is adding in some small delays of up to a week, however for most clients the time saving is still worth sending it on these routes. There has also been a subsequent increasing of rates to try and help manage demand.

As before if you are a shipper having issues with your goods leaving china and want to explore alternative routings or markets then you should get in contact with AJF and will see if our expertise in logistics and supply chain issues can assist you.

Vietnam is becoming an increasing popular alternative to China and and more buyers are integrating Vietnam manufacturers into their company’s supply chains. Vietnam has three industrial regions northern, central and southern. The northern region which includes the border with China has the North Key Economic Zone this is made up of several cities including Hanoi. This region is particularly attractive to companies who would like to move some of their manufacturing into Vietnam and keep limited manufacturing operations in China.

The Central Key Economic Zone is made up of five provinces in this region with the majority of industry being concentrated in the Da Nang area.  This area is currently not as economically developed as the north or south regions, but is continuing to attracted inward invest and is steadily growing its occupancy.

The Southern Key Economic Zone is made up of several southern provinces which included eight cities. The biggest of these is Ho Chi Ming City and the region around this has created the biggest economic investment zone across the country, with the highest occupancy rate. Industrial sectors include:

• Equipment/Machinery
• Food Processing
• Textiles
• Chemical Product Manufacturing
• Metal and Plastics Manufacturing

Logistics within Vietnam are now well developed around the main ports, with significant investments in the port facilities and surrounding infrastructure. Most of the world’s main shipping lines have at least one service every week calling at Hau Phong, Dan Nag and Ho Chi Minh allowing a whole range of European destinations to be served.

From Ho Chi Minh City all common equipment is available including 20ft and 40ft High Cube size containers for standard shipments. Flat racks and open-top containers are available for out of gauge shipments.  and LCL services for loose and palletised cargoes. AJF can give rates for shipments to buyer’s purchasing under incoterms such  FCA, Ex-works and FOB incoterms for importers and DAT/DDP for exporters from Ho Chi Minh.

If you are a UK exporter and are an existing exporter or looking to export for the first time, especially with BREXIT happening in the UK. AJF handles export shipments from the UK to the Ho Chi Minh region we can offer assistance on which incoterms to use, best way of shipping including packaging of goods and if using an LCL or full container service.

For buyers who are shipping from various factories in the Ho Chi Minh region, our buyers consolidation service exists to collect the goods, store them in a warehouse and when there is sufficient for a full container load, stuff the container and arrange the export  clearance. The service gives the  benefit of saving on freight charges and having the security of only your goods in the container. If you are currently shipping LCL and are interested in this option then contact us to see if it would beneficial for you. The service is suitable for buyers who ship full containers from several different factories but want to ship more frequently. The buyers consolidation service means trucks can regularly call at the manufactures and pick up any goods ready and bring them to a central warehouse. Once there is sufficient for a container then it is loaded and shipped. This service can be beneficial for a buyer’s supply chain operations. If you need quality inspections to be made of the goods then we can arrange for them to be inspected once the have arrived at the storage warehouse. Quality inspections can be done to a buyer’s specification with photographs, written reports and where required even live video chat, allowing any potential production  issues to be dealt with immediately.

For very specialised cargoes including ones which require  geared vessels we can arrange both part and full ship charters, we have extensive contacts in the ship broking world and can usual find a vessel for any project cargo and port. Our consulting services are available to help clients plan how they are going to move the cargo, this includes covering the type of cranes required, trucks and site access. AJF has consulted on project shipments across the world and resolved many issues our clients have faced successfully.

With the shipping rush for Christmas 2007 due to start picking up again now we are half way through the year there is a real possibility of a meltdown on the container availability from China back to Europe. Effecting both 20foot and 40foot containers with the main problem being, simply the supply is out stripping demand. Booking times are increasing to 3-4weeks for containers and some lines are unwilling to accept large bookings because they feel they would risk compromising their service quality to the shipper. While rates are in decline for years now they are showing signs of increasing with lines implementing peak rate surcharges and other various surcharges.

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