Supply chain operations are now being gradually resumed in China with export freight volumes beginning to return as the country’s production picks up.
Last week we reported that people had returned to work in China under strict hygiene guidelines, enforced by local government, resulting in staff shortages. As more and more employees return to work following the imposed quarantine period, it is expected that shipment volumes will increase again with production output predicted to increase considerably throughout early March.
Congestion and capacity shortages are still expected for the next few weeks while factories catch up on production. While both ocean and air freight services are now available, going forward there is expected to be pressure on outbound capacity.
This is a summary update to the current situation in China:
- While individual circumstances vary by province, the overall situation is that output from factories is now resuming. It is anticipated that it will take a number of weeks for factories to catch up on production following the extended holidays and quarantine period.
- While export freight volumes are beginning to return as production picks up slowly, shipping capacity is being restricted to match demand. There is likely to be an increasing squeeze in ocean outbound capacity in the weeks to come.
- The lack of trucking over the last few weeks has caused a backlog of imported cargo at the ports and terminals in China. This is causing port congestion, which is affecting some exports.
- Turning to road transport, cross-border trucking has now largely been normalised.
- Air freight capacity is still being impacted although to a lesser extent. We are seeing prices fluctuating daily. It is expected that there will be significant increase in demand for capacity from 1st March which will drive rate increases.
At PFE we are acutely aware that you may have concerns. We will endeavour to keep you informed of any further changes to the situation in the next few weeks. If you have any questions please don’t hesitate to contact [email protected]