As the COVID-19 situation spreads around the world, we would like to update some information about its impact on global supply chains.


· Pressure on China’s domestic trucking network is easing as drivers are resuming duty and road restrictions and closures are partially lifted.

· Both inbound andoutboundair freight capacity is still under pressure, as is inbound ocean capacity due to outbound blanked sailings during and after the Chinese New Year period.

· As production gradually resumes, outbound air freight capacity will be significantly constrained.

· Airport and ports are open and operational with normal scale.

Reefer and dangerous goods are areas of concern due to lack of reefer plugs and lack of yard space for DG Containers. Carriers are limiting acceptance of Import Reefer Container and implementing a congestion surcharge. DG Cargo acceptance requires pre-approval before being accepted into terminals.

  Air freight cost increase quickly in March


· Worldwide belly and freighter cargo capacity reduction have largely been limited to flights originating in Asia thus far, driving significant change in the export market in China.

· Intra-Asia trade lanes are now tremendously impacted and congested. Intra-Asian wide-body belly capacity has reduced heavily and is driving a rapid surge for air freight rates on a daily basis.

· Flight cancellations on China routes have removed 6,200 tons/day of capacity. Rates from Europe, the Middle East and the Americas to China are significantly higher than usual as a result.

· China outbound freight capacity is getting congested as production gradually resumes. Volumes have been ramping up since mid-February and we are expecting a heavy quarter-end in Q1 2020. 


· As the virus spreads, other countries are also experiencing capacity reductions. Outbound cargo capacity for South Korea has been reduced 6%, according to Seabury.


· Some carriers have announced suspension of passenger flight operations to Milan, mainly from US, Middle East and Korea. We may see more cancellations in coming days as the situation evolves, and this could have a significant impact on belly capacity on Italy trades.

Ocean freight still stable

· The impact of COVID-19 has been spreading rapidly beyond China during the last few weeks. The biggest current impact is on space and container availability throughout the world.

· There are Asia inbound constraints for March, including from Europe, Middle East/Indian Sub-Continent and Oceania trades.

· All carriers have filed Peak Season Surcharges effective March 2020, to cover the additional cost of repositioning empty containers and to capitalize on the capacity shortages.

· There are expected to be Asia outbound space constraints for March, including Europe, Middle East/Indian Sub-Continent and Oceania trades

Equipment shortages are a major concern across Europe. Fewer vessel arrivals from Asia have resulted in wide-spread equipment and space shortages throughout nearly all countries trading with China and Asia