Amid the recent outbreak of the Coronavirus, industries worldwide have been experiencing disruptions to the workflow, including the shipping and logistics industries.
Considering the powerhouse that is China and its economy, it is no surprise that the new virus has shaken the global supply chain. As the third largest trading partner to the United States, China and its industries play an important role for many logistics companies and freight forwarders.
Shipping and production in China have become halted as results of efforts to combat this fatal virus. With companies shutting down operations in China, airlines suspending flights, and busy container ports on lockdown, the chances of these disruptions reaching your company are highly likely. The best thing to do now is to be prepared and stay informed – below are important updates you need to know:
Effects on Ocean Freight
Port shutdowns have caused huge issues within the shipping industry, as many ships cannot gain access to major Chinese ports. Considering China is home to a number of the world’s largest shipping ports, this will likely cause delays and reroutes. It is important to keep in mind that a significant amount of shipping companies have taken a stance in response to the viral outbreak. Maersk, Hapag-Lloyd, MSC, and CMA have released statements regarding their plans to reduce the number of vessels with routes connecting China and the United States. Ocean freight is likely going to take the biggest hit, as most goods are shipped by sea and, since the inception of the COVID-19, demands have considerably dropped. Countries like Australia and Singapore have taken more authoritative measures by refusing to allow any ships that have been in Chinese ports until the entire crew has been adequately screened and deemed virus-free.
Effects on Air Freight
The Coronavirus has not only affected sea freight – air freight has been dealing with substantial disruptions as well. A number of airlines, including American Airlines, United, and British Airways, have suspended their services to and from mainland China, while many other airlines have reduced services by 50%. Taking this information into consideration, logistics companies should expect unpredictable rates, reduced capacity on passenger flights, and added delays. Here are a few other key points to keep in mind when using air freight:
- DHL has currently halted all services in the Chinese Hubei province
- UPS has made flights to China a voluntary option for their pilots
- FedEx Express is continuing services in China, but may be experiencing delays
The Coronavirus and its effects on the shipping and logistics industries are not to be taken lightly; the disruptions have already been significant. However, with the right communication and preparation, you can develop solutions to keep your business and supply chain running smoothly. Global Cargo is here to help – our team has been closely monitoring each update and we are available to answer your questions and concerns. Contact us today – Go Global, your cargo in good hands!