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Worldwide Update: April 28

Worldwide update: April 28

The past week has seen much headway in collective efforts to stabilize economy, society, and livelihood. Worker strikes have begun to appear across several countries in Southeast Asia, Latin America, and Europe, many of them demanding safer working conditions and wage increases. As more and more analysts point out supply chain inefficiencies, Japan will earmark ¥240 billion ($2.2 billion) to help domestic companies move operations home or across Southeast Asia. 20 seaports around the world will also collaborate to unify their efforts in sustaining cargo operations and mitigate risk of infection.

The first 24,000 TEU ship has launched and will begin port rotation from Asia-Pacific to Europe and back, via the Suez Canal. The HMM Algeciras is the first of twelve ultra-large containerships ordered by Korea-based carrier HMM that are due for delivery through 2021, which will restore lost capacity from previous lane cancellations by other global carriers. In spite of this, Chinese container manufacturers have reportedly halted production in an effort to maintain prices even as carriers and ports have notified shortages around the world.

AUSTRALIA

Reports emerged that international borders may remain closed for at least 3 to 4 more months. The government continues its offer to help agricultural exporters pay for air freight costs, which are in high demand for countries in Asia and the Middle East.

BANGLADESH

The government has extended the lockdown to May 5. On April 22, the government resumed customs operations for the country’s ports and land border crossings. The Chattogram Port continues its port activities even as port capacity utilization reached dangerous levels the previous week. Government officials have asked shipowners to forward containers to inland water terminals; however, lack of workers and truckers has also congested some of the ports.

BRAZIL

The Minister of Justice has resigned following the sacking of the Federal Chief of Police by President Bolsonaro, stoking political tensions in the country. Despite this, ports continue operations with slight reductions to workforce and stricter health screening measures. While São Paulo officials will begin to ease lockdown restrictions on May 11, other states are taking different strategies to reopen their communities and economies.

Analysts observe that as one of the largest exporters of agricultural goods, the continued lockdown will affect door-to-port delivery performance due to road closures and lack of available roadside support.

CHINA

Reports of defective masks from international clients have led to a government crackdown on quality control for manufacturers as the Ministry of Commerce imposes additional export regulations and produced a blacklist of 1,600 suppliers without proper certifications. The resulting additional paperwork and processing time has increased customs broker workloads, raising clearance rates dramatically.

EGYPT

On April 23, parliament approved amendments to provide expanded power to the presidency and military prosecution as a response to the coronavirus outbreak. Among the measures enforced will include the prohibition of certain commodity exports and restrictions on the trade of others, as well as the banning of private and public gatherings. On April 24, the Suez Canal and five Egypt ports were shutdown due to a nationwide sandstorm.

HONG KONG

The government has extended social distancing measures until May 7. Due to cancellation of freighter services by Cathay Pacific on April 30, there may be more import congestion in the weeks ahead.

HUNGARY

The government is reopening land borders with Croatia, Austria, Serbia, and Slovakia. However, the movement restrictions placed on the country will be extended to May 3.

INDIA

On April 23, the Ministry of Shipping issued a comprehensive notice for all major seaports to allow free storage time for the duration of the lockdown, provide additional temporary storage space at no charge, and ensure no penalty or performance-related is levied. Some global carriers are skipping Nhava Sheva, Chennai, and Mundra ports due to extreme container congestion.

In a turn of events, Mumbai and Delhi International Airports announced that they have implemented post-lockdown measures and are ready to resume operations. Meanwhile, the government also has banned medical evacuation flights based on fears they may be exploited by the nation’s wealthy.

INDONESIA

On April 22, the government prohibited passenger vehicles in or out of Greater Jakarta region. Domestic passenger flights were suspended after April 24, but existing international flights, repatriation flights, and government related flights are exempt. This suspension will last until June 1. Social distancing restrictions have been extended to May 22.

ITALY

Outbound flight capacity is still heavily impacted. The government begins easing lockdown this week, with export manufacturers and construction projects to resume Monday, and many other industries to reopen May 4. KWE sources indicate that the three major seaports—Genoa, Livorno, and La Spezia—are fully operational with available intermodal support.

JAPAN

Prefecture governments in Tokyo, Chiba, Saitama, and Kanagawa have requested companies to allow employees a 12-day holiday from April 25 to May 6, coinciding with Golden Week. Many airlines have transitioned to move cargo on passenger planes to Haneda and Narita International Airports.

MALAYSIA

On April 22, the government announced an extension of the lockdown to May 12, with a possibility of further extension to the end of May. Import containers are given a grace period of 2-3 days to be removed from seaports. Exporters are still required to apply for approval from the Ministry of International Trade and Industry (MITI) to ship cargo.

MEXICO

On April 21, Mexico began the third phase of its containment efforts. Local and state measures will be enforced based on rate of infection. Mexico City will start regulating vehicle traffic—truckers and taxis are exempt— and will reduce 20% of mass transit routes.

NETHERLANDS

The government-imposed measures have been extended to May 20, although seaport operations continue with no congestion. Flight capacity remains strained with few outbound services to the Americas and Asia destinations.

PHILIPPINES

On April 23, the government extended the lockdown in large parts of the country until May 15, and eased measures in provinces with low rates of infection—retail stores may operate, and public transit will resume at reduced capacity. The North and South terminals of the Manila Port Complex have stabilized capacity utilization by strategically transferring containers across port yards, although operations are still impacted by congestion as the government urges importers to move cargo in a timely manner.

SINGAPORE

On April 20, the government announced an extension of the partial lockdown until June 1. Trucking and port services remain impacted due to staff shortages.

SOUTH AFRICA

To date, 35 land border posts and two seaports have been closed as a result of the government-imposed lockdown. The nation’s flag carrier may liquidate its assets and let go of its workforce after the government announced it would not send additional funds on April 14.

SPAIN

The government has reduced port rates as part of its efforts to support the reawakening domestic economy. Additionally, on April 23 the Port of Algeciras designated additional space for truckers and empty containers, to be used during peak traffic hours or in times of overcapacity.

SRI LANKA

As of April 26, the government-imposed lockdown has been extended to May 4, and the Sri Lanka Ports Authority (SLPA) has extended the demurrage-free period in the Colombo Port to May 7 as port capacity utilization hits 90%. The government has also opened the Mattala Rajapaksa International Airport for aircraft parking services to offset space utilization at the Colombo International Airport. The nation’s flag carrier has extended its flight suspension to May 15.

TAIWAN

A sharp increase in coronavirus cases among the navy has led government officials to discuss the possibility of another lockdown measure. KWE sources report air and seaports are operational.

THAILAND

The nation’s flag carrier is in talks with the government to discuss a potential bailout as the airline runs dangerously low on cashflow. Seaports remain operational only three days a week, and only domestic passenger flights will resume on May 1; international pax capacity remains suspended and the government has extended the lockdown to May 31.

UNITED KINGDOM

The government-imposed lockdown has been extended to July 5, and the Prime Minister announces that easement strategies will be outlined in the coming days. Seaports have been confirmed by KWE sources to be operational, and airports continue to handle inbound and outbound cargo flights. While some airports are hopeful that they will re-open by the end of May, capacity for both inbound and outbound flights are still significantly reduced, though rates are reducing gradually.

UNITED STATES

Many transit hubs have extended the lockdown order to May 15 as state governments have not provided updates on when the restrictions will be lifted. Chicago O’Hare International Airport (ORD), Los Angeles and JFK airports are experiencing delays in recovery of freight due in part to ground handlers staff reductions, in turn delaying trucking receipt and delivery times.

VIETNAM

On April 21, Vietnam lifted social distancing measures with a few district exceptions in Hanoi. A third of air capacity between Hanoi and Ho Chi Minh City has been restored by the nation’s flag carrier. A proposal to cut seaport loading/unloading fees by 30% has been rejected by the Ministry of Transport. The government continues to control rice exports, but KWE sources report that there is no port congestion.

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