Weekly Update – 18.03.2022

Weekly Update – 18.03.2022
March 18, 2022 Hannah Marshallsay

Covid-19 outbreaks in China and Hong Kong impact Sea Freight and Air Freight services adding further delays to an already strained global supply chain. BAF surcharges are to be introduced as a result of soaring oil prices.

Covid-19 Outbreaks in China Disrupt the Market

The impact of the Coronavirus pandemic continues to disrupt the market, with cases significantly rising in China this week, leading to Chinese authorities imposing the lockdown of the key port city of Shenzhen and smaller areas in Xiamen, Shanghai and Ningbo. The restrictions, which are due to stay in place until at least 20 March, are causing increased pressure on transport and export operations. While port and customs services are running normally at the moment we regrettably anticipate some disruption to the movement of cargo as restrictions increase.

As a result of the lockdowns imposed, office workers are being asked to work from home where possible and only 50% occupancy is allowed at any time. Certain factories, warehousing, depots and terminals have been closed to limit the spread of infection which is likely to impact productivity. While trucking services are operational, there will be delays to the inland transportation of export containers due to the testing requirements and inspection of health documents of truck drivers.

Air Freight services have also been affected by the Covid-19 lockdowns in Hong Kong and China with Chinese authorities implementing strict restrictions to ground staff operations resulting in flight cancellations and the limitation of services. Due to the current fluctuation and lack of stability in the market as a result of this and the Russian invasion of Ukraine, space will be squeezed and air freight rates may continue to rise. 

PFE is committed to providing transparency of the ongoing condition of the market so that customers are fully aware of the current situation. Our teams will contact you if your shipment becomes affected by these issues.

BAF Surcharge to be Introduced

It has been widely reported that the Russian invasion of Ukraine has contributed to soaring oil prices leading to significant increase in fuel and transportation costs. As a consequence, shipping lines are imposing emergency bunker fuel charges that will be effective from April 1st and spot rates will also increase as demand remains high. 

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