Coronavirus Outbreak Update
The World Health Organization (WHO) yesterday declared the Wuhan Coronavirus outbreak a global health emergency, reporting more than 10,000 confirmed cases worldwide. The outbreak has also begun to impact global supply chains. Airlines have suspended some flights to China beginning on Saturday because of a "significant" drop in demand. Ocean carriers have reacted with additional blank sailings to offset low cargo levels on lanes from Asia owing to Lunar New Year and the seasonal lull in demand. Port operators report a lack of stevedores and truck drivers is slowing down vessel turnaround times, and storage yards are also beginning to clog up. Some carriers, however, are reporting "business as usual", with Japan's ONE, for example, saying that, other than in Hubei province, "vessels are still maintaining their normal port calls and operations". Please see the below list for some additional supply chain-related updates.
There currently is no estimate on a timeline for resumption of normal business operation in China. Much will depend on events that unfold in the coming week during the extended CNY holiday. Janel will continue to provide updates as information becomes available. In the interim, please reach out to your local Janel team or representative if you need assistance to mitigate any potential impact to your supply chain.
Singapore has announced it is closing its borders to all Chinese travelers. As Singapore serves as a key transshipment hub in Southeast Asia, this may have a significant impact on supply chains.
Cathay Pacific, a major passenger and cargo airline for the region, will cut its capacity "50% or more" starting Jan. 30 until the end of March 2020, the airline announced Tuesday.
In order to prevent the spread of Coronavirus, China authorities announced that the Lunar New Year holidays will be extended to Feb. 9 in several municipalities / provinces (see below list)
Despite an edict from the Ministry of Transport yesterday urging port operators to keep ships moving, a lack of stevedores and truck drivers is slowing down vessel turnaround times, and storage yards are also beginning to clog up.
The coronavirus has now topped the SARS virus from 2003 with the number of cases reported closing in on 10,000 and the World Health Organization declaring the crisis as a global health emergency.
Several international logistics conferences scheduled in the next 4-8 weeks have been cancelled.
Shipping markets were spooked yesterday by rumors that Beijing was contemplating ceasing cargo operations at many of its ports, but there has been no official statement on the matter.
Terminal operator PSA Singapore has issued an advisory demanding all ship crew with passports from Hubei province must remain onboard and visitors who have been to mainland China, Hong Kong or Macau in the past 14 days will be declined entry to PSA ports.
The US has extended coronavirus screening to 20 airports that handle almost all incoming passengers from China to prevent the entry of the deadly virus. The CDC has also installed facilities to quarantine passengers who exhibit symptoms at 20 locations, including Los Angeles, San Francisco, San Diego, Honolulu and New York.
The Janel team is monitoring, in particular, the revised blank sailing schedules for key steamship lines which will affect capacity when the factories again begin shipping.
Active communication regarding cargo ready dates is imperative as we sort out how blank sailings and significantly reduced air capacity will affect space availability and transit times.
The region currently most affected by this virus is Hubei Province. Hubei Province in central China is located at the junction of the Yangtze River and the Han River (and so considered a logistics hub).
It is known for automotive, iron and steel, petrochemical, food processing, equipment manufacturing, electronic information and textiles. Furthermore, the province is strong in the metallurgical industry, shipbuilding and logistics.
The large base of traditional manufacturers and industries in this region will be most affected.
Global supply chains, however, will be affected. Think in terms of workers not being able to return to their homes, not being able to get back to work, reduced work force, lack of port and airport handling workers, lack of truck drivers, etc.
Inbound raw materials for traditional manufacturers and growing high-tech and bio-tech clusters will also be affected, thus adding another layer of disruption to this already fragile situation.
Anticipate substantial production delays for products that are in the just-in-time space, or thereabouts. E.g. your patio furniture manufacturer is likely to be less affected by potential raw material shortages than your pharma or computer chip manufacturer.
Many airlines have suspended service or greatly reduced passenger service to/from China which will impact air freight capacity worldwide (not just on China routes).
The cutting back of flights will have a worldwide domino affect on cargo that typically travels below deck (belly) on passenger flights.
It appears that all-cargo operators are continuing to service major Chinese air hubs, but these companies will also monitor the situation and may pull or re-route aircraft to protect crew and cargo.
Holiday update for Asia:
February 3-9
Xiamen, Shenzhen, Guangzhou, Shanghai, Ningbo, Fuzhou, Nanjing, Chongqing, Qingdao, Dalian, Zhongshan
ALL STAFF WORK AT HOME, FEW STAFF on shift at the offices
February 10
Xiamen, Shenzhen, Guangzhou, Shanghai, Ningbo, Fuzhou, Nanjing, Chongqing, Qingdao, Dalian, Zhongshan
ALL STAFF BACK ON DUTY
February 3
Tianjin
BACK ON DUTY