Coronavirus Logistics Update 5 (COVID-19)
Our weekly updates on the effects of the Coronavirus on logistics services and supply chains. The virus is continuing to have effect across the world. On Wednesday India pro-actively decided to cancel all tourist visa’s from Friday 13th March until the 15th April. This will mean a dramatic decline in the number of air passengers into and out of India. As a result expect airlines to cut back on the number of services they operate to the major cities. This is going to have a similar effect on airfreight as happened in China, with a big reduction in capacity. While India is not as big in the world as China is in company’s supply chains, this will still have an impact. While India has not put in any place movement restrictions internally for the moment, the flow of goods to and from the ports remains unaffected. However if the authorities are forced to take action then shippers should expect to face a similar situation to that what happened in China. The USA has now enacted a travel ban for all movement from EU countries apart from the UK and Ireland starting from this Friday. It is to early to speculate what kind of effect this will have on airfreight demand between these two regions.
Currently the total number of people infected in the UK stands on Friday at 590. However officials are speculating that the true figure may be higher than this. More and more sporting events are being cancelled including the UK Football Premiership cancelling all matches now and the F1 Australia Grand Prix. Panic buying is still taking place in some countries especially effecting toilet paper supplies. Of all things people fear the most about the Coronavirus, it is running out of toilet paper.
Ocean freight is continuing to feel the fallout from the China shutdown. Chinese ports are now back operating at levels pre the Chinese new year before the virus countermeasures had been put in place. However container yards are still very busy and as mentioned previously shipping lines still have blank sailings planned for the rest of March. Overall the supply of container equipment is proving very difficult for the shipping lines. Empty containers are not where the should be at, resulting in some locations having very low supplies. This is then having a knock on effect on other non-chinese services as shippers are unable to get the equipment they need. This means no loaded containers for the service which then sails only part full. Then at the destination port there is insufficient equipment available to reload and send back. The overall effect means that supply chains all around the world which are normally totally independent of China are being impacted because of the shutdown which occurred there.
UK hauliers which operate out of Felixstowe, London Gateway and Southampton are starting to feel the effects of the drop off from China as first blank sailings reduce the amount of vessels arriving. For a lot of road hauliers and rail operators this is going to result in a significant down turn and will be financially expensive. For any transport operator a lorry or locomotive not working is not making money and just incurring costs. This will be unfortunately be going on probably till the end of April once all the blank sailings have worked through. However disruption to supply chains in other countries may then have a further impact.
Additionally logistics are not yet facing the effects of the economic slowdown the Coronavirus may cause in the world’s economy. The full fallout is not likely to be seen until the second half of the year and may in the worse case scenario have the same effect on transport services as the actual virus. Overall the situation is very fluid. Peak infection rates have not yet been reached in many countries yet and so the effect on logistics and the supply chains which they support are going to continue to face disruption.