coronavirus international shipping
The unfortunate coronavirus has been called “one of the worst epidemics we have seen in our lives,” states one of Scarbrough’s local Chinese partners. It has been a large threat to the lives and economies of not only China, but around the world. Originally at the end of January, the Chinese Government extended Chinese New Year and told companies to not resume until after the holiday. In fact, according to Reuters, “The end of the Lunar New Year holiday, China’s busiest travel season, was pushed back to Sunday from Thursday to ‘reduce mass gatherings’ and ‘block the spread of the epidemic,’ a Cabinet statement said. The holiday started on January 24 and was originally to end on January 30. The government of Shanghai told Universities, primary and middle schools and kindergartens across the country that it will postpone the opening of the spring semester until further notice. It ordered sports stadiums to close and religious events to cancel.” This has been extended until further notice. As of mid-February 2020, the coronavirus death toll in China is over one thousand. Several people from other countries, including the United States have been reported as infected and/or have been evacuated from China. According to the NY Times, “Those evacuated are [taken to military bases and] expected to be quarantined for 14 days, with frequent checks from medical personnel to determine whether they have developed fevers, coughs and other early signs of the virus.”
Factories and Transportation Shut Down
Due to the extremely high risks of coronavirus exposure, Chinese factories, sea ports, airports, and transportation have been shut down. As a result, importers and exporters of Chinese goods are seeing significant delays. One could forecast a future bottleneck of much like we saw in the LA/Long Beach Port Strikes in the early 2010’s. That could just be one effect. The Wall Street Journal states, “A steep reduction in airline services to China in response to the coronavirus outbreak is slashing trans-Pacific capacity for high-value, expedited goods that move as airfreight, and setting the stage for potential outbound cargo bottlenecks once Chinese factories resume production. Dozens of U.S., European and Asian airlines have suspended service to mainland China, reducing capacity for goods such as electronics that often travel in the bellies of passenger planes and triggering a jump in freight shipping rates. Some airlines have also halted flights into Hong Kong, the world’s busiest international air cargo hub.” These are just some examples of outcomes that pertain to international shipping.
Current Working Status
One of Scarbrough’s local Chinese partners, China International Freight, sent a status update of the current working situation in China.
No company is allowed to resume work unless they obtain a permit issued by local authorities. The authorities will first grant permits to those enterprises which are related to daily essential services such as banking, financial and medical services. Only forecasting, the shipping industry most likely will not obtain the permit to work until February 17, 2020 or after. The same goes for steamship lines, airlines, courier service providers, and transportation.
In & Out Permit
This permit is the core reason truckers, terminal workers, and employees are NOT able to station back to their positions. For example, if a driver is NOT a citizen that lives in Shanghai City, and he does not have an “In & Out” Permit, he would be restricted from the city and wouldn’t be able to enter back in. Unfortunately, 95% of blue collar workers are not local citizens. They are residents in other provinces like Hubei, Hunan, Jiangxi, and Shandong. Individuals that walk through the fields and sneak into the city are reported to the police. When they are caught, they are quarantined for at least 14 days. Moreover, the police are offering generous rewards to encourage such reporting. Basically, surveillance is everywhere. In severely affected communities or complexes, only one person from the area, family or unit is allowed to go out and shop for food or personal supplies. These individuals are only allowed to go to one shop every other day.
Blank (aka void/cancelled) Sailing Plans
These have been managed by carriers for quite a while. Forwarders are able to create online bookings with carriers, but are not able to ship goods upon expectations. The blank sailings have been posted, however, they are subject to change. Scarbrough’s Chinese partner, CIF, states it hopes the sailings could be reinstated to normal in March.
In the interim, our Chinese partners, steamship lines, airlines, and forwarders are still in the process to obtain the “Resume-to-work” permit. One situation will include half of the employees at home, half in the offices, taking turns every other day. The other situation will include half of the employees on morning shift, the other half on afternoon shift.
What to do
Please try to understand that in this situation, transit times and delays cannot be controlled. As stated before, some of Scarbrough’s local partners have mentioned this epidemic is one of the worst they have seen in their lives. Scarbrough will continue to monitor the situation, while keeping our partners and friends located in China in our thoughts. Scarbrough will send updates on your cargo if it is significantly affected. If you have any specific questions, please contact your direct customer service representative.
The Scarbrough Group of Companies, headquartered in Kansas City with local presence in every major port in the world, is a complete international and domestic supply chain service provider, offering U.S., Mexican, and Canadian Customs brokerage, Import & Export Transportation Solutions, Domestic brokerage and asset-based trucking, Warehouse fulfillment and distribution services, Trade Compliance Consulting, Large Equipment and Project Cargo moves, as well as Parcel Audit Savings. Scarbrough is widely known for its trade experts, training, personalized customer service, customized solutions, and data analytics tools. Since 1984, Scarbrough has continued to satisfy its clients by following its motto on a daily basis: “It is our job to make your job easier.” Moreover, our team of experts is available at your disposal. We offer free consultations on any topic from supply chain optimization and duty savings opportunities to the basics, helping to guide new importers and exporters as they jump into the world of global trade. Contact us now.