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COVID-19 Update

COVID-19 Update

Individual government responses to the COVID-19 pandemic have created myriad ripple effects to specific industry verticals as different regions halt and resume business activities. Airlines continue to deploy cargo freighters and increase passenger-to-cargo flights amid reports of medical supply shortages, providing humanitarian aid and government flights as needed. While the large decrease in passengers has dropped traffic, cargo screening and aircraft cleaning and disinfecting procedures for may contribute to extended transit times.

The International Maritime Organization (IMO) and the 10 designated Port State Control regimes, responsible for the inspection and the enforcement of global regulations on ocean vessels, held a meeting on April 8 to discuss harmonized approaches to maintain the global supply chain throughout the COVID-19 crisis. A separate report also notes that bunker fuel inspections and scrubber installations related to the IMO 2020 high sulfur fuel oil ruling are expected to drop due to risk of infection and worker shortages.

Most countries no longer impede the flow of cargo in and out following previous weeks’ reports of trucker congestion due to curfews or movement restrictions. However, the relaxation of customs entry procedures has led to Port backlogs at key hubs for agricultural products, compounded with truck driver shortages, lack of refrigerated containers, and road closures in many countries, may result in spoilage of thousands of tons of food. Other necessities, such as toilet paper and cleaning supplies, have also been affected. The discretionary designation of “essential service provider” has also affected importers’ abilities to retrieve shipments in a timely manner, exacerbating the backlog.

BANGLADESH The government has extended the lockdown period to April 25. Thousands of workers are protesting on the streets of Bangladesh due to unpaid wages, which may lengthen trucking transit times. Due to limited port storage capacity, the average vessel waiting time at Chattogram port has risen to seven days. In response, the government has waived storage fees during the shutdown period.

BRAZIL Carrier Maersk pledged to send 1,800 refrigerated containers from China to match Brazil’s agricultural export production. The quarantine policy imposed on Sao Paolo is still set to end April 22.

CHINA All commercial borders have reopened for cargo movement as of April 10. Some inland ports and seaports still experience container congestion due to lack of available workers and truckers, and trucked cargo as well as incoming vessels may be periodically inspected.

HONG KONG Hong Kong International Airport is operating at near-capacity as export cargo loads outnumber freighters and converted passenger jets available. However, lack of demand for non-medical related goods has lowered container throughput at seaports.

INDIA On Monday the government announced an extension of the national lockdown indefinitely. Seaports faced widespread cargo congestion in the past week when over 40,000 containers were stuck in Port of Chennai due to lack of workers and drivers, leading port customs officials to allow that imports be moved to nearby CFS and Inland Container Depots to free up space.

INDONESIA On April 10, the government enforced large scale social restrictions, and officially moved the Islamic holiday Idul Fitri/Mudik to December. Airlines continue to increase cargo freighter flights to accommodate demands for perishables, pharmaceuticals, and medical supplies.

ITALY The government has extended lockdown to May 3. The government also issued a formal decree on April 7 designating all of its seaports as unsafe and could not guarantee personal safety. However, all seaports remain operational for cargo movement.

JAPAN On Monday, the government officially declared a state of emergency, but did not impose a mandatory lockdown. Due to decreases in traffic, Narita Airport (NRT) will close down one of its two runways indefinitely.

MALAYSIA The government has extended lockdown to April 28. Authorities have started the third phase of port clear-outs to further reduce congestion.

NETHERLANDS The Port of Rotterdam reports normal business operations despite the government-imposed lockdown, which has been extended to April 28. Amsterdam Airport Schiphol also reported that average cargo flights per day have doubled.

PHILIPPINES Port utilization has decreased as more importers retrieved shipments over the weekend, but still remains well over half capacity—vessel and shipment arrivals may be delayed. Davao International Airport is currently only accepting essential goods. Philippines’ flag carrier, Philippine Air, partially resumed international and domestic passenger flights after automated disinfectants were installed and the head of Immigration announced resumption of services. The main island of Luzon will remain under lockdown until the end of April.

SINGAPORE Singapore’s Changi Airport will close its second terminal operations for 18 months beginning May 1. The government-imposed lockdown will continue to May 4.

SOUTH AFRICA The government has extended national lockdown to the end of April. Port regulations have been further relaxed on April 10 to allow the transport of all goods. However, there are still worker shortages which may impede port operations and exacerbate cargo buildup. Air traffic is still limited to medical evacuations, refuelings, humanitarian efforts, repatriations, and cargo transportation only.

SPAIN The government has extended lockdown to April 26. However, some lockdown conditions have relaxed, allowing some non-essential workers to return.

THAILAND Island and resort provinces have updated lockdown statuses, and the international flight ban remains until April 18. The situation remains unchanged from the previous week. Individual provinces have enforced lockdown measures at their own discretion, which may include road closures and traffic screenings, potentially impeding trucking.

UNITED STATES The government has tightened medical exports and empowered officials to seize outbound shipments due to supply shortage. Seaports remain operational but observe sharp drops in container throughput. Some land borders in the US South are also seeing decreases in trucking due to production stoppages, while others are experiencing longer wait times due to trucker congestion. Discrepancies in lane traffic may be related to types of commodities that generally move through them. Many airports and airlines are receiving federal aid this week, with some airlines to resume and expand international cargo destinations. Individual states have extended lockdowns to the end of April or the beginning of May.

VIETNAM The government-imposed lockdown and border closure remains in effect until April 15. Air carriers are expected to resume domestic flights later in the week, but frequency and capacity may be subject to change. Seaports noted an increase or 14% year-over-year in cargo handling for Q1, and slightly slower growth throughout the COVID-19 crisis as supply chains were diverted.

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