We would like to share our latest update on the Covid-19 virus.
General Status – China / Hong Kong
Our latest in-house survey now indicates that around 75% of factories are potentially back to full production. The reality however is that delayed and cancelled orders from overseas as well as a downturn in Intra Asia trade, are causing production levels to fall.
Vessels and Cancelled Sailings – Far East
In the last week, carriers have been reacting to the downturn in trade. The three carrier alliances have made significant cuts to sailings –
2M Alliance – have suspended their AE2/SWAN service for Q2, as well as cancelling individual sailings on other loops. The vessels withdrawn on AE2/SWAN are the largest 23,000 TEU ships and represent approximately 21% of their Asia to North Europe capacity.
Ocean Alliance – Have confirmed 10 void sailings for April at present, which is around 13% of their capacity. More cuts are expected into May and June.
THE Alliance – The smallest alliance has confirmed 6 sailings cancelled in April, representing around 20% of their capacity.
The situation is changing daily, and we are expecting further cuts from all three alliances.
Trains from China
The service from Wuhan has resumed this week, although at present it is only through to Hamburg, Duisburg and Mala. Rail operators are generally not accepting bookings of FCL containers for onward movement to the UK due to uncertainty over the European border restrictions.
We would ask customers still interested in this product to contact us with specific details of the cargo to be moved.
Vessels and Cancelled Sailings – South East Asia
Delayed and cancelled orders are affecting most factories in South East Asia, although ports in Vietnam, Cambodia, Indonesia and Myanmar continue to operate well.
However, these origins rely on the Asia to North Europe vessels calling at the transhipment hubs, where choices are limited due to the cancelled sailings:
Singapore – 2 out of 16 vessels are cancelled in April and currently 4 out of 16 vessels cancelled in May.
Tanjung Pelepas – 3 out of 20 vessels cancelled in April and 10 out of 20 vessels cancelled in May.
We advise customers shipping from these origins to allow an extra 7 days transit time due to the reduced number of sailings.
Vessels and Cancelled Sailings – Indian sub-continent
With complete lockdown in India, Pakistan and Sri Lanka, the carriers serving these origins are now cancelling sailings. The situation is changing rapidly, but some carriers have already cut capacity by around 25% for April and May.
General Status – India
The country remains in total lockdown until the 14th April.
We are pleased to advise that cargo received last week was eventually allowed to ship by the Indian authorities after initially being turned away at the port.
General Status – Pakistan
The lockdown in Karachi until 6th April has been extended to include other major cities and the country is largely at a standstill.
Our colleagues are working from home where possible, but with a limited ability to manage paperwork that is often subject to bank regulation.
General Status – Bangladesh
The government has extended the shut-down of all public and private offices for another 5 days to the 9th April. This unfortunately is likely to affect those customers that have paperwork delayed with Bangladesh banks.
We continue to receive cargo in Bangladesh and Chittagong port remains operational. Our CFS facilities are working with reduced labour, but we are continuing to pack containers, which are being safely delivered to the port.
General Status – Mauritius
The complete lockdown began on the 20th of March for an initial period of 2 weeks and this has now been extended to the 15th April.
General Status – Madagascar
The country remains in complete lockdown until at least the 6th April.
There is still little cargo moving; capacity is much reduced, and rates are still at an all time high. Some cargo scheduled to move by air is switching to sea freight and some orders have been withdrawn.
All carriers have cancelled previously agreed commitments on capacity and rates, and prices are very volatile for both imports and exports.
Airlines are deploying passenger aircraft to carry cargo only. Emirates & British Airways have started with further carriers following suit.
Minimal volumes available to fly and with capacity still at peak rates. Currently the demand is for medical supplies across China going into Europe and the USA.
Capacity is available but at peak rates.
With all the passenger flight cancellations, carrier options on freighters are limited.
Rates and space available on ad hoc basis, but we foresee space issues and rates increasing this week.
All passenger flights are cancelled from the 1st April. With the increased volumes from Southern China coming through, Singapore is at peak with limited capacity. Rates have increased again.
The country is on lockdown till 14th April
All passenger flights cancelled up until the 4th April. Further updates to follow.
Island wide curfew in place. Under lockdown till 10th April.
All passenger flights in/out are cancelled till further notice. The country on lock down until the 15th of April unless a government permit is issued to individuals / companies.
Nearly 70% of carriers have cancelled flights in /out of Dhaka. There is limited carrier choice & limited space. The Government has declared public holidays from 26th March to 4th April due to current situation.
Madagascar has declared lock down. The airport is closed for passenger aircraft until the 20th April 2020. From today, all our colleagues are working from home.
Space is available but there is limited cargo; limited capacity and rates are rising every day.
All our European offices, hubs and partners are open and working within their own government guidelines; but rates are rising and delays will increase.
Freight is still moving, although borders are closed for travellers and holiday makers. Delays are occurring because of driver health checks at border crossings and extended transit times should be expected. Priority is being given to essential freight such as foodstuffs and pharma.
Whilst we continue to try and maintain our road freight departure schedules, volumes are dropping so departures are becoming more infrequent. The situation is also challenging due to the border delays that drivers are encountering to/from the UK. We will continue to accept bookings on a case-by-case basis, and all rates will be ad hoc, please contact your usual ACS representative.
Freight movements may well be affected as DCs / warehouses cease operations.
There is also an issue with the ability to print documentation for border checks which may also affect transits.
Most trailers moving to the UK from Turkey transit Italy. At the moment The operations on the trains and ferries are functioning but with the caveats mentioned above.
We do have a multi-modal option for flat pack freight moving from Turkey, which offers a reduction on the standard trailer rates. Please contact us if you would like details on this service
Confirmed cases of the virus continue to rise in the UK and the government has instructed everyone to stay at home, apart from essential workers, until at least the 14th of April when the situation will be reviewed. Non-essential travel is not allowed. All shops, except for food shops and pharmacies, are closed, as well as restaurants, pubs and clubs.
ACS is complying with all government measures. Our offices are operating with a skeleton staff where it is necessary and will remained manned from 0:800 to 17:30; all other colleagues are working from home with full access to company systems. You will be able to reach your usual ACS contacts by phone just as if they were in the office. We do not anticipate any notable impact to our customers.
Our CORE Command Team (Central Operating Response to an Event), is monitoring the situation carefully.
As previously indicated, inbound freight is still flowing through with no disruption. However, volumes are significantly down.
Our UK ports remain fully operational, although we are seeing some congestion as a result of the on-going effort the ports are making to minimise the risk of infection to their workforce. The deep cleaning operations are taking up to 4 hours a day, during which time vehicle booking slots are removed. We are doing everything possible to minimise delays with deliveries and would ask our clients to work with us if vehicles miss their timed bookings.
COVID-19 and UK Customs Relief Measures
ACS is very much aware that many clients are unable to receive goods either due to warehouse closures, or due to a lack of warehouse space. Furthermore, as the sale of many goods have been hugely impacted due to the current restrictions, the need to protect precious funds is essential. ACS can offer solutions to postpone the payment of duty and VAT.
HM Revenue and Customs has announced some relaxation of regulations which include:
The current Government advice permits customers operating warehouses to continue taking deliveries of even non-essential goods, provided they are complying with the official government advice.
ACS has a good availability of transport and will continue to provide delivery services whilst the ports and airports remain open.
We ask our clients to please facilitate our drivers so that they can access toilet and hand washing facilities.
Storage of Cargo and Laden Containers
ACS has taken space at various locations in order to assist customers who are unable to accept deliveries. If this facility is required, please communicate with your usual ACS contacts for further information.
Over the first two weeks of April there would normally be 37 export sailings on the UK to Asia trade. However, the first wave of cancelled vessels from China in February and early March has reduced the number to just 28. The lack of vessels is causing space problems and increased rates for exports, and we would ask clients to book with us as early as possible.
Export contract rates have been withdrawn till further notice and only ad hoc market rates are available.
Emirates has announced they will be converting passenger 777 into cargo only freighters. Capacity will increase for European movements, along with ISC and middle east. Rates for these services are on ad hoc basis.
*ACS Operations, 1st April 2020*
We would like to share our latest update on the Covid-19 virus, which has now extended to 142 countries.
The situation continues to improve in China, with the rate of infections reducing. Factories still remain cautious and there are still some local restrictions on the number of on-site personnel allowed in some provinces, but business is rapidly returning to normal.
Our in-house survey of ACS shippers now has 60% of factories back to full production.
Business is returning to normal in most of China. Shenzhen reports trucking at 95% and Ningbo, Xiamen and shanghai are now at 90%. Tianjin is improving and is now at 75%
Shipping Lines and Logistic providers
Most shipping lines and logistic providers continue to provide a combination of office and remote working. ACS continues to observe the government guidelines and is working with a mixture of both on-site and remote working.
Ports and Terminals
All ports and terminals (except Wuhan) continue to work normally, and empty pick up and laden return services are working smoothly from all terminals and off dock facilities.
There are no congestion or equipment issues reported at any China ports as at today’s date.
Vessels and Cancelled Sailings
Carriers have generally restored full services from China, although this could be subject to change at short notice. March and April will see Asia to North Europe capacity reduced by an average of 8%, but this is normal for this time of year.
With import shipments now being delivered in China, the equipment situation for exports in easing.
For UK exporters, the lack of equipment arriving from China in the last month has meant that there has been a shortage of equipment for exports. This has affected freight rates for exports, and we are discussing with the clients affected.
Trains from China
We are still operating services from most China origins into Warsaw, with transfer onto an ACS dedicated overland service from Poland to the UK. Rates and transit times are available on request.
South East Asia and the Indian Sub-Continent
Following the 33 cancelled sailings from Asia to North Europe in February, we are now seeing a much-improved situation through the transhipment hubs of Singapore, Tanjung Pelepas and Colombo. Chinese production is increasing by the day, and this has given the carriers the confidence to fully restore many services that call at the transhipment points.
There are only 5 major vessels missing over the remainder of March, and whilst there are some space and backlog issues at present, it is clear that the restored capacity will ease the situation by the end of the month.
There is little cargo moving; capacity is much reduced and rates are at an all time high. As the virus affects destinations, most customers are informing us that they are much less reliant on air freight as social distancing effects foot fall and consumer spending.
The global reduction of flights due to cancellations and restrictions has meant increased rates as airlines look to recover costs.
Middle Eastern carriers are gradually reducing passenger flights and freighters in / out of China as they do not have the cargo or passenger traffic to justify flying.
Qatar has stopped freighter services. Cargolux have cancelled some freighter services due to lack staff/ pilots.
Capacity is available with 5 freighter services available per week. These come at peak rates.
Virgin has pulled all BSAs and are now applying market rates. Finnair has started reducing capacity and will cease flight operations as of 1st April in or out of HKG.
Rates are on the increase.
Lufthansa and Qatar have pulled all passenger flights. Cargolux and Silk Airways currently available but with reduced capacity. Freight rates are increasing daily. This will have a knock-on effect on Eco-Air rates.
Rates are starting to climb as demand for capacity increasing. With all the flight cancellations into Europe, carrier choice is reducing and will see even further increases in the coming days.
We have been notified of reduced capacity from India, Vietnam, Cambodia and Mauritius. Details still to be finalised
All our European offices and partners are open and working within their own government guidelines.
We continue to maintain our road freight departures schedules from the UK, but it is likely that delays and schedule alterations will occur in the coming days because of in-country restrictions and border controls.
So far, we have not seen any financial impact, but it now seems inevitable that costs will increase. We will update with information on this as soon as we have it.
Most trailers moving to the UK from Turkey transit Italy. The current situation is that operations on the trains and ferries are functioning as normal with no problems.
Confirmed cases of the virus are rising in the UK and the government is working on measures to slow its spread. ACS will comply with all government measures as and when they are announced. We have implemented our CORE Command Team (Central Operating Response to an Event), part of our Business Continuity Plan, with members who are responsible for all our operations and sites.
Our IAP (Immediate Action Plan) identifies critical activities and employees, and the inputs required to maintain them. The IAP is kept under constant review and we will update as the situation develops.
UK airports are currently operating normally but the traffic is much reduced.
UK ports are currently operating normally but following all UK government guidelines. All incoming vessels must provide a Declaration of Health Statement and those that cannot will be isolated before being allowed into port. Procedures are in place to minimise contact with vessel crews.
However, the situation is being kept under continuous review at all ports.
We have both chilled and ambient warehousing space available in the UK.
The Midlands – 6,000 pallet spaces
West – 4,000 pallet spaces
South West – 22,000 pallet spaces
South Midlands – 2,500 pallet spaces
Midlands – 7,000 pallet spaces
Yorkshire – 2,000 pallet spaces
Please contact us if you need storage solutions to manage your demand volatility.
Void sailings continue to have a huge impact on exports. On the North Europe to Asia trade, a further 17 vessels are cancelled through to the end of March. This includes 8 sailings out of Felixstowe, 5 out of London Gateway and 4 out of Southampton. The shortage of space combined with a shortage of empty containers is giving the carriers the opportunity to increase freight rates and apply Peak Season Surcharges. This situation looks set to continue into April, as the tail end of vessel cancellations from China still have a few more weeks to run.
US routes continue to deteriorate, and rates are increasing steadily as the US carriers downgrade services.
HKG / China limited services are running but at increased rates levels, most carriers are applying Express type levels.
ISC rates are expected to increase through this week and into next, India have suspended all new visa applications so looking forward, limited international passenger numbers will mean a reduction on passenger flights and hence reduced capacity.
New Zealand, 85% of the capacity has been removed from the market.
*ACS Operations, 17th March 2020*