Coronavirus and International Shipping
Concerned about the impact of the coronavirus outbreak on international shipments? We here to help you navigate, so we’re pulling together as many details as possible to help figure out how shipments may be affected. The main takeaway is that production, shipping, and fulfilment from China will be majorly affected due to strict measures being put in place.
Hong Kong remains functional, only having a minor impact on courier services and warehousing. So, if you’re operating in the region and need some stability in shipping and fulfilment, Hong Kong is a good choice.
How Can Companies and Shippers Manage the Impact?
Global trade, with its heavy emphasis on Chinese manufacturing, has been rocked by a reduced Chinese labour force and business closures.
Here is what we know at the moment:
Reduced Air Freight
American, United, British Airways, and Qantas airlines have suspended service to and from China. Cathay Pacific is reducing flights to China by up to 50% through March. Further reductions and suspensions of scheduled flights are expected as the coronavirus runs its course, and supply contraction will cause unpredictable rates, reduced air freight capacity, and create delays. That will push up air freight prices.
Global Mail Slowdown
Flight suspensions have taken a toll on global postal services. The U.S. Postal Services informed its counterparts in other countries that it is “experiencing significant difficulties” in getting letters, parcels, and express mail items to China, Hong Kong, and Macau due to a lack of flights. USPS will no longer accept transit mail to these regions. China Post is disinfecting offices, postal counters, and vehicles, to ensure safe delivery and to protect staff. China is using non-face-to-face methods to deliver the mail it’s still processing, including temporary storage at the postal outlet, availability for collection from the outlet, or delivery to a smart parcel locker.
Reduced Courier Capacity
Dropoff and delivery services for HK Post, Seko, DPD and wnDirect postal services were suspended until February 3. Couriers have partial or full lockdowns in 13 Chinese cities, causing delays in inbound and outbound deliveries. However, postal services are slowly being resumed and mail delivery should return to a large extent over the next few weeks. For urgent deliveries, use express shipping methods, as these have remained largely functional during the outbreak.
Ships in Quarantine
Unlike air freight, ocean freight is usually independent of passenger traffic and accounts for the bulk of supply chain shipments. Meanwhile, the Yangtze river remains an important internal waterway for China, running through Wuhan. With traffic being disrupted, the effect is significant, but it is still early days.
Most of the world’s goods are shipped by sea but the marine industry is set to take a hit as demand drops and countries put stringent measures against the Coronavirus in place. Singapore and Australia refused to allow any ship that’s been at a Chinese port in the preceding two weeks into their ports, while other countries, like South Korea, have put more stringent screening measures in place.
Factory Production in China
To combat the coronavirus, the Chinese government extended the Lunar New Year holiday to 9 February in Shanghai, Ningbo, Shenzhen, Xiamen, Fuzhou, and Qingdao. Although work was set to resume on 10 February, many businesses directed their employees to work from home. Many factories will remain closed for the time being. As a result, factory production and business will be severely affected.
US Customs
US Customs is not planning to hold air or ocean shipments from China due to the coronavirus for both courier and postal shipments. As such, if you already have shipments on the way from China, you shouldn’t experience delays at US Customs.
Economic Impacts Begin to Show
The impact on the world economy is already beginning to show. Already, events around the world are being cancelled or postponed. This is not just happening in Asia, either. Barcelona’s Mobile World Congress, a mobile tech show, has been called off after Nokia, Vodafone and Ericsson pulled out.
In China, factories have yet to resume production causing supply issues for companies around the world and what experts predict will have a huge negative impact on the world economy.
Tourism is another industry that’s taking a huge hit. Chinese visitors accounted for 150 million trips in 2019, and now that they’re staying home. From Paris to Bangkok and New York to Singapore, hotel and airline bookings are down (Hilton just announced its temporarily shutting down half of its Chinese hotels, while most airlines have now suspended all routes to China); attractions are being forced to close temporarily because of low visitor turnout, and restaurants and shops that would normally have been busy with tourists remain empty as even locals shy away from socializing.
Shipping Management Tips
While you’ll be concerned with resolving transportation and supply chain issues, it’s important to remember to communicate early and often with anyone that may be affected by issues you face. Here are a few tips for managing your shipping during this period:
- Notify clients in case of delays due to the outbreak, especially if you are waiting on production in China.
- Communicate with suppliers to stay on top of changes to the current situation – even if they’re not operational, most will have teams to assist with your queries.
- Use express courier services to avoid delays.
- Let customers know if they may experience delays in receiving their orders and provide customer service so they feel they can keep track of what’s going on.
We continue monitoring the situation and send updates as we learn more.
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