|Shippers will begin to feel the disruption to their supply chains with delays and decreased capacity as carriers are reducing the number of vessels in an effort to stop the spread of the Coronavirus. Home to several of the busiest container ports and airports, a lockdown on China factories and workers is having a rippling effect in consumer supply chains.
The shutdown means that some ships are note able to berth into Chinese ports, others are stuck in dock waiting for workers to return to ports. Further, some vessels are idling in “floating quarantined zones,” as several countries have refused to allow ships that have called Chinese ports to enter until the crew has been declared virus-free. In Hong Kong, Local Port Authorities have also declared that vessels which have called China ports may be subject to a 14-15 day quarantine period before entering the Port Zone, which will only further delay the carriers’ schedules.
For shippers hoping to turn to airfreight, many carriers have cancelled or reduced the number of flights to China citing the move as a prevention measure or due to the lack of demand. The majority of carriers that remain are freighters, whose airfreight services come at a higher cost as the rate is not offset by a passenger ticket.
The below is an update on logistics operations in China:
· Manufacturing – Delayed due to the Chinese New Year extension. Further delays may occur due to quarantine of labor if Coronavirus symptoms are present.
· Ports – Wuhan/Wenzhou ports remain closed until further notice, although it is believed the ports might be operational again on February 17. All other ports are open and operational. Some carriers are also allowing online submission to avoid unnecessary traveling for shipping documents.
· Sailings – Carriers continue to blank sailings to balance the lack of demand for cargo moving. Once cargo is moving again, we expect there will be limited space on vessels and cargo scheduled to move may be rolled in favor of cargo that is already ready to move. It is also worth noting that several carriers are mitigating detention and demurrage charges due to the holiday extension.
· Airfreight – Most passenger airlines have cancelled flights in/out of China for the immediate future. Airfreight is still moving on freighters, but at a higher cost than airfreight that moves in the belly of a passenger plane.
USA Port Arrival Procedures Announced
As reported before, please remember that the U.S. Coast Guard announced U.S. port arrival procedures immediately for vessels that have called Chinese ports (excluding Hong Kong and Macau). The incoming vessel must report to the U.S. Coast Guard Captain of the Port on the crew’s health. As long as there are no sick crew members on board, vessels will be allowed to berth normally. Currently no vessels calling the Port of Los Angeles or the Northwest Seaport Alliance of Seattle and Tacoma have not been delayed in arriving at berth.
British Scientist Makes Breakthrough in Coronavirus Vaccine
A leading British scientist has made a significant breakthrough in the race for a coronavirus vaccine by reducing a part of the normal development time from “two to three years to just 14 days. The scientist states that they will be ready to start testing the vaccine on animals as early as next week. While the vaccine will be too late for the current outbreak, it will be crucial for prevention in the future.