What is Explorate’s overall approach to the COVID-19 situation?
We are operational! As COVID-19 is an unpredictable virus, now is an important time to ensure you have an agile supply chain.
We follow the guidance provided by the World Health Organization (WHO) and national authorities such as Ministries of Foreign Affairs and National Health Authorities in the countries where Explorate is exporting from and importing to.
Imports from China are continuing, however quarantine measures have been forced by the Australian Government in some states stipulating that all vessels are to be in quarantine (time at sea counts) for 14 days prior to making port in Australia.
Our friends at Maersk have changed their vessel routing to go via Sydney and Melbourne prior to docking in Brisbane to allow a 14 day quarantine from leaving Ningbo.
The situation is developing day by day, and we strongly encourage customers to reach out to Explorate if they have any concerns.
Update: March 20th 2020
Beijing has detailed a huge raft of new rules limiting foreigners accessing the country.
China has dramatically tightened quarantine control on international cargo ships with many major ports – including the largest two, Ningbo-Zhoushan and Shanghai – have instituted a 14-day restriction for any ship or person onboard calling from the worst affected coronavirus-hit countries.
China’s current worst affected list includes the UK, Switzerland, Sweden, Belgium, Norway, Holland, Denmark , Austria, South Korea, Japan, Iran, Italy, France , Spain , Germany and the US, a set likely to expand as the pandemic spreads to less developed countries around the world. Currently, Australia is not on the list of countries affected by the restriction.
In terms of vessel transit times, the ruling would not hugely effect vessels coming from Europe or the US at the moment, but could see intra-Asia loops have to rejig how they call at South Korean and Japanese ports.
Update: March 4th 2020
‘Coronavirus’ labelled the word of the month, Explorate take looks into how this affects the shipping industry.
COVID-19 has now caused more deaths than Sars, with over 3,000 deaths and 89,907 confirmed infections in every continent except Antarctica.
The disruption to China’s container ports has had subsequent repercussions, with 80% of the world’s good trade by volume carried by sea, it is not so surprising that freight rates have tanked. We continue to ‘ride the storm’ amidst the outbreak, with big reductions in seaborne vessels from China to the rest of the world as a measure to stop the spread of coronavirus.
The world’s biggest container line Maersk (MAERSK.CO) warned on Thursday 20th February that the coronavirus outbreak would weigh on earnings this year, adding to pressure on a sector already hit by trade wars and an economic slowdown.
The impact of COVID-19 has been spreading rapidly beyond China during the last few weeks.
The numerous vessel cancellations in/from China due to very limited available export volumes, have resulted in considerably less space and containers available in all countries trading with China.
Whilst most terminals state they are operating normally, it’s the shortage of workers that is causing delays. Trucks travelling through key provinces are being quarantine for 14 days, we also see an increase in times for customs clearances. As expected all airports, ports and road shipments in and out of Wuhan have closed, apart from relief supplies.
We advise that you reach out to our team in relation to any of your current or future shipments. We will continue to monitor which stations are accepting and distributing cargo.
Update: February 15th 2020
The Chinese Government has notified manufacturers in multiple regions to delay reopening until the 17/18th of February 2020. Most suppliers are operating with staff working from home in the meantime.
We advise all customers to make direct contact with their suppliers to get updates on their orders and operating start date. If you are concerned about your next shipment, please get in touch with our team.
Update: February 12th 2020
It has been confirmed that restrictions are being put in place for any vessels arriving from China to Australia that departed on or after February 1st. They will not be allowed to enter an Australian port until 14 days have passed since departure date, and the coronavirus is therefore deemed to no longer be a potential risk.
This may unfortunately cause delays to your shipments, however we will aim to have containers shipped on suitable vessels and inform affected customers accordingly.
Please be reminded that the regulation is still subject to change and that we will continue to monitor the situation.
Update: February 7th 2020
At Explorate, we’ve been watching the ongoing events and impact of the Coronavirus very closely. With a large portion of our customer base and network moving cargo in to and out of China – we place great importance in keeping our team and customers up to date as the Coronavirus outbreak transpires.
First and foremost, there is no doubt that the Coronavirus is having adverse effects on businesses that trade with the economic powerhouse that is China. Outside of the immediate health risks, last week the Chinese Government took a bold step and extended the Lunar New Year holidays by an extra week. While most workers are still planning to return on the 10th of February there are credible reports that some regions are considering keeping the lights off for the rest of February.
A common question we’re getting asked is, “what impact will the Coronavirus have on freight rates and container availability?”
From a freight supply and demand perspective, we expect a supply contraction to potentially cause unpredictable cargo rates – particularly for the airfreight market. As airlines continue to cancel routes, space on any flights departing mainland China will surely be at a premium. Lufthansa for example, has suspended all flights to and from China until the 29th of February, and with most carriers likely to follow suite, it’s predicted that we’ll see a spike on the air cargo spot market.
For containerised ocean freight, as most ports in China are reporting an extreme oversupply of empty containers and paired with seasonally weak demand we aren’t predicting as much volatility as the air freight market. With that said, if the shutdown persists beyond next week towards the end of February, there is no doubt that there will be heightened demand for containerised cargo and with-it the inevitability of higher freight rates.
When commenting on the post-Virus freight environment, Peter Stallion of Freight Investor Services says “It’s difficult to tell if any volume rush, post-quarantine, will cause a capacity crunch, whether airlines will put on as much capacity as possible, or indeed how the container market will react to pick up cargo – or whether shippers have the underlying demand this time of year to create a volume spike,” said Mr Stallion.
Some of our customers have made the proactive step to source contingency inventory from suppliers outside of mainland China – if this is a potential option for your business please contact the team at Explorate and we can assist in providing a supply chain solution so you can assess the feasibility of such a move.
The big (and largely unanswered question) is when will this all end? As the Chinese Government scrambles to contain the outbreak there is weakened confidence that there is light at the end of the tunnel, and doubt remains that we’ll be back to business as usual next week. Our team in China is still operationally online (albeit working from home) and are available to relay any internal correspondence with your suppliers if required.
We’re monitoring the situation in China very closely and we’re committed to keep all of our customers up to date as more information comes to light – to keep up to date please visit our newsfeed on the matter at www.explorate.co.