C.H. Robinson, a supply logistics service provider, issues a number of advisories on the impact of the Covid-19 crisis on worldwide shipping. Shown, the Port of Savannah
EDEN PRAIRIE, Minn. -- Transport and logistics provider C.H. Robinson has compiled a series of special Covid-19 advisories that track important developments in the global shipping marketplace. In additional, the company also posted an article, Three supply chain lessons for businesses coping with COVID-19, to help manage logistics concerns.
Among the latest announcements are rate increases in global ocean shipping. C.H. Robinson stated there have been General Rate Increases in ocean carriers that provide service: from the United States and Canada to Asia,Middle East and Indian Sub-Continent; from Asia and the India subcontinent (India, Pakistan, Sri Lanka & Bangladesh) to the United States and Canada. These increase will be applied to all containers at the origin receiving terminal on or after May 1, 2020.
In addition, the company recently provided guidance on the current status of domestic shipping and stated, "States around the U.S. continue to enact 'Shelter in Place' or having non-essential businesses close. U.S. states who have implemented these are mostly adhering to the Department of Homeland Security's CISA's critical infrastructures guidelines. CISA guidance on Identifying Critical Infrastructure During Covid-19 Crisis can be viewed in full here.
According to CISA businesses are determined critical if: "the focus during this response is maintaining the businesses and services that enable continued economic and social vitality. It is not focused on maintaining business as usual nor is it trying to sustain the operating capacity of non-critical businesses and industries."
NORTH AMERICAN ADVISORIES
-- All U.S. ports remain operational. Ocean vessels are moving as planned, but some carriers are cancelling sailings due to low demand.
-- Inbound volumes to the U.S. west coast are higher compared to last year at this time. However, the spike in volume is typical for the ports and unlikely to cause disruption or delays.
-- Customs and Border Protection (CBP) issued additional guidance for Entry Summary Payments impacted by COVID-19. CBP is no longer accepting requests for duty deferral, except on a case-by-case basis.
-- It's important to note, New York's self-quarantine guidance for travelers does not apply to truck drivers entering and leaving the state. States around the U.S. and provinces in Canada continue to include transportation, logistics and ports as essential when "Shelter in Place" orders are put in place. We continue to monitor the status on a state by state/province by province basis and will report any exceptions.
-- Warehousing space is getting tight due to lack of outbound activity from warehouses compared to inbound.
ASIA
-- Ports and airports remain operational.
-- Although demand for essential commodities related to COVID-19 remain high, some non-essential businesses are canceling purchase orders due to temporary closures. For that reason, overall demand has decreased, and ocean carriers are likely to introduce blank sailings in April and May to stay aligned with the current demand. We continue to work closely with our customers to accommodate their supply chain needs in the fluid environment -- including offering expedited FCL and LCL programs from Asia.
-- The lockdown is starting to have a material impact on flow of goods. Ocean carriers are in discussion for capacity removal to cope with lack of demand.
-- As of March 25, 2020, India issued a lockdown for 21 days to help stop the spread of COVID-19. Essential services and goods, which includes transportation and logistics, are an exception and will continue to operate.
-- Although international and domestic flights have been grounded, the lockdown does not apply to cargo planes. Additionally, some passenger airlines plan to convert their aircraft to operate as cargo planes. Currently, enough capacity is available for the demand.
-- Ports and Customs in India and Sri Lanka will remain open with limited personnel.
-- Many ocean carriers have activated their Business Continuity Plans and will announce any rotations they need to make in order to comply with the mandatory quarantine of 14-days for all vessels and crews.
-- Blank sailings are expected in the days to come as shippers are not able to pick up containers due to the lockdown and labor shortages.
-- Empty yards in many regions are closed to comply with government regulations.
-- Central Warehousing Corporation in New Delhi announced the temporary closure of their warehouse until the situation returns to normal.
EUROPE
-- Market remains highly volatile as many non-essential businesses close and production of essential products related to COVID-19 take priority. We are offering air charter services and expedited FCL and LCL programs from Europe.
-- Europe truckload continues to experience delays in cross-border shipments.
U.S. TRUCKLOAD (TL) FREIGHT
-- Thus far, truckload providers and trucking associations are not reporting any material driver constraints due to illness or limited interest. For more details, click here.
U.S. LESS THAN LOAD (LTL)
-- In general, LTL services are running as well as can be expected through the COVID-19 health crisis.
-- Service standards appear to be somewhat impacted as shippers and receivers are more intentional about social distancing leading to longer dwell periods.
-- Many businesses are closed and freight is stacking up in terminals pending disposition and carriers work to schedule appointments, this is negatively influencing on time performance.
GLOBAL OCEAN AND AIR
-- China to North America trade lane has seen 58 cancelled/blank sailings to the Pacific SW ports and 111 to North America. For perspective, the US-China trade war resulted in 33 cancelled/blank sailings to Pacific SW ports. Ocean volumes are picking up and North American ports can expect to start seeing increased volumes next week through April.
-- Air capacity from Europe and China to the US is constrained with passenger flights curtailed. C.H. Robinson has chartered cargo planes and airlines like Delta are putting passenger planes back in service for cargo only. Generally, airfreight rates are volatile day by day at roughly four to five times normal rates.
-- China export shipping lines are reporting consistent bookings and strong utilization following China's return to production.
-- Carriers will likely continue to consolidate their position through blank sailing and other rationalizing strategies that mitigate their risk of oversupply to a market that is changing week by week, day by day.
ABOUT CH ROBINSON
C.H. Robinson is a logistics service provider for companies across the globe and across industries, from the simple to the most complex. With nearly $20 billion in freight under management and 18 million shipments annually, we are one of the world's largest logistics platforms.
To learn more about C.H. Robinson's services contact Francois Wolberg, Global Textiles Logistics lead, at 678-427-9233 or Francois.Wolberg@chrobinson.com. To read the company's latest logistics and shipping advisories, click here.