As the Coronavirus crisis begins to stabilise in China, the effects of the virus are being increasingly felt by other countries across the world. PFE is preparing for all eventualities to ensure our customers’ operations continue as smoothly as possible.
In these unprecedented times our focus is on ensuring our customers’ operations continue as smoothly as possible in this difficult period. At PFE we are planning for every eventuality over the next few weeks as the pandemic takes hold. We have taken all necessary precautions to be able to continue to deliver services for our customers with the majority of PFE staff working from home if the government mandates that step is required. Please be reassured that most of our services can be provided to our customers remotely, and we have the IT capability to do that.
This is a summary update of the current situation in the key affected areas of the world, and impact to the supply chain, resulting from COVID-19.
China
Businesses are returning to normal operations throughout China, with the exception of Wuhan/Hubei Province. China’s manufacturing sector is recovering, and is reported to have reached levels of up to 80% of pre-Chinese New Year capacity. Transport movements are also gradually returning to normal.
Terminals are still reporting congestion but ports are gradually clearing their cargo backlog. The sea freight delays we have highlighted in previous updates are expected to continue in the short term, with further improvement as normalised operating levels return.
As shipping lines still see a decline in demand for shipments from China, they continue to announce blank sailings, we expect this to be likely to continue until the end of March.
Only Wuhan airport remains closed to commercial traffic. Air freight to and from China however has remained challenging as demand outpaces returning capacity. Air freight rates are rising after the grounding of many passenger flights in Asia has left shipping lines scrambling to book limited spots on cargo planes as Chinese production picks up. It is expected that the significant increase in demand for capacity that is driving rate increases will continue until at least the end of March.
South Korea
The government in South Korea is encouraging business as usual, albeit with hygiene guidelines in place including the promotion of working remotely. Travel restrictions involving South Korea have expanded, leading to some flight cancellations, which is impacting air freight capacity out of and through the country.
There are no blank sailings from South Korea from shipping lines at present, although there is some delay in and out of ports due to staff restrictions resulting from the government enforced hygiene guidelines.
Italy
Although the Italian Government regulation issued last week provides strict limitations to social activities to the whole country, goods circulation is allowed. At this time, all manufacturing and warehousing remains open and operational, albeit with strict health guidelines.
Shipments between Italy and the rest of Europe are largely unaffected. Haulage services to and from Italy are in the main, operating as usual but with delays. Collections are possible, but there is some disruption due to limited access to staff which is having an impact on collection turn around and transits times.
USA
The US Government announced yesterday restrictions on travel between 26 countries of the Schengen border-free travel area in Europe and the United States. The United Kingdom is excluded from the ban. The US travel ban does not include cargo, or the movement of cargo.
With approximately 50% of Trans-Atlantic air freight capacity on passenger aircraft, we expect this will have a major impact on the air freight market. There will be tremendous pressure put on capacity and without doubt will cause prices to skyrocket. We are monitoring the situation and will be communicating regularly with our air freight partners to ensure that we are abreast of any future potential disruptions to air operations.
At PFE we are acutely aware that you may have concerns. We will endeavour to keep you informed of further updates to the situation and any that require a change in implementation over the coming weeks.
