NOVEL CORONAVIRUS UPDATE - Date : March 2nd, 2020
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NOVEL CORONAVIRUS UPDATE Date : March 2nd, 2020
H i g h l i g h t s – M a r 2 nd
China – factory resume in production rates
▪ Over 90% of the government owned enterprise are resumed in production
▪ By the end of last Fri (Feb 28th), following are the rates of several key provinces
• Zhejiang 99.8%
• Jiangsu 96%
• Anhui 94.8%
• Hunan 93.5%
• Guizhou 100%
▪ For the rest of coastal provinces : Shandong, Fujian,
Liaoning, Jiangxi, Hebei and Guangdong, the
resumption rate is over 80% by end of last Wed
(Feb 26th).
Source : https://finance.qq.com/a/20200228/048126.htm
02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 2H i g h l i g h t s – M a r 2 nd
China – Shenzhen city (South of Guangdong province):
no permit is needed before resume operation
▪ Effective from Feb 23rd, no needed to apply permit before resume to work
▪ Instead,
▪ Factories and enterprises have to following the set of requirements
imposed by government before resume to work
▪ Local authorities would check the implementation status of those
requirements
▪ Non-compliance factories and enterprises have to take corrective actions,
production have to stop if eventually unable to comply the set
requirements
▪ Health information of workers have to submit to the local governments for
record keeping
Source : http://www.sz.gov.cn/cn/xxgk/zfxxgj/zwdt/content/post_6738283.html
02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 3H i g h l i g h t s – M a r 2 nd
South Korea – COVID-19’s effects on supply chains
▪ South Korea is highly vulnerable to supply chain disruptions, the outbreak threatens to slow domestic
demand as residents spend more time in isolation.
▪ The country started the year seeing green shoots amid reduced U.S.-China trade tensions. However,
with the virus spreading fast inside South Korean borders, the shock to domestic consumption
(accounting for 50% of gross domestic product) will be significant. The South Korean markets and
currency have suffered, while manufacturers’ confidence has plunged the most in five years.
▪ So far there has been limited impact on cargo operations from the outbreak within Korea, and ports
and airports function mostly as normal. But with Korea’s trade so closely linked to China, vast
swathes of the shipping sector are suffering from the factory and transport disruption there.
▪ In Feb, the shutdown in China has also had a huge impact on Korea’s automotive manufacturers,
which have struggled to keep just-in-time supply chains flowing.
▪ This led Korean OEMs to reduce production in February and is highly likely to affect production in
March as well. In February, the volume is expected to drop approximately 35% from the initial
production forecast.
Source : https://qz.com/1809436/coronavirus-is-hobbling-factories-in-cambodia-vietnam-myanmar/ , https://theloadstar.com/south-korean-shipping-sector-heading-for-disaster-as-virus-crisis-hits-industry/
02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 4H i g h l i g h t s – M a r 2 nd
Vietnam – shipping firms in troubled waters as coronavirus hits trade
▪ Vietnamese shipping firms are reporting falling revenues after the coronavirus outbreak brought trade-related
activities to a standstill in China. Ships are docking at other ports outside China, which accounts for 40 percent of
international shipping in Vietnam, but this pushes up costs.
▪ Quy Nhon Port in central Vietnam now operates only 20 days a month instead of 30, with shipments falling by 15
percent. Last month it handled 100,000 tonnes less than targeted.
Source : https://www.hellenicshippingnews.com/vietnam-shipping-firms-in-troubled-waters-as-coronavirus-hits-trade/
Italy – €3.6bn stimulus to tackle coronavirus
▪ Italy will inject €3.6bn into its economy to mitigate the impact of the largest outbreak of coronavirus in Europe as
policymakers around the world consider the consequences of transport and supply disruptions resulting from
efforts to contain the disease.
▪ Roberto Gualtieri, Italy’s economy minister, said on Sunday the government would introduce tax credits for
companies that reported a 25% drop in revenues, as well as tax cuts and extra cash for the health system. The
package will amount to 0.2% of GDP, and would come in addition to €900m worth of measures unveiled on
Friday for the most severely hit regions.
Source : https://www.ft.com/content/a6f59348-5bae-11ea-b0ab-339c2307bcd4
02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 5Restrictions from Vessels from China ▪ US Non-passenger vessels are allowed to operate in the US with restrictions if they have been to China or embarked passengers in China within the last 14 days under the condition that there are no sick crewmembers. Any vessels with sick crewmembers are required to notify the nearest Coast Guard Captain of the Port. ▪ Australia Any vessels that have left China or transited through the country after 01 February and less than 14 days prior to the date will be required to meet coronavirus requirements set by the government. ▪ Vietnam All Crews on those vessels not ever called Chinese ports, but have Chinese Nationality & signed on board around 14 days are also not allowed to go onshore when calling ports. ▪ Singapore Maritime and Port Authority of Singapore (MPA) has implemented temperature screening at all sea checkpoints. Visitors having a travel history in Hubei or possessing PRC passports issued in Hubei, will not be allowed to enter or transit through Singapore. ▪ Indonesia Vessels that have visited China during their last 10 port stops will be thoroughly inspected by the Port Health Authority. Anyone suspected of being infected with the virus must be treated by authorities. 02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 6
Restrictions from Vessels from China ▪ Turkey Cargo ships have been permitted to dock although they will undergo strict inspections. ▪ Philippines The Philippine Ports Authority said workers in ships coming from China are prohibited from disembarking to prevent the spread of the virus. ▪ South Korea Any vessel that visited China within the last 14 days will be inspected by officials from the Korea Centres for Disease Control and Prevention agency before entering. The vessels can only enter South Korean ports if the inspectors find no sign of infection and give them the all-clear. ▪ Kenya There will be an increase of vessels’ docking time at the port, as Kenya Ports Authority (KPA) screen all crew members for the virus and inspect all vessels entering their ports. 02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 7
Restrictions from Vessels from South - Korea ▪ Kuwait Completely reject cargo vessels from South Korea ▪ Vietnam Country’s capital Hai Phong City - the entire vessel will be checked by staff from Hai Phong International Health Quarantine Center, with all crew members to remain on board. 02 March 2020 8
Yusen Logistics Operation
Yusen China offices
▪ From Mar 2nd, total 80 staffs (around 40% of total staff force) will work at office
▪ Work-from-home or remote office will still be the dominant mode
▪ No disruption of operation
▪ Communication via e-mail, conference call or chat group
Yusen Italy and South Korea
▪ Normal operation and no impact on SCS shipments
Yusen HKG Control Tower (CTO)
▪ HK CTO exercises alternative shifts at office, i.e. around 50% of the staff are worked from
home, while another 50% are worked at the office.
▪ No disruption of operation & communication
02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 9Yusen Logistics Operation:CFS,Trucking,Carriers
Origin Customs Warehouse Truck Carrier Terminal
Trucking service is still limited in 1/. Normal in operation
Dalian Normal operation Normal operation supply, but gradually resume to 2/. Majority of staff are worked Terminal as normal
normal. from home
Trucking service is still limited in 1/. Normal in operation
Fuzhou Normal operation Normal operation supply, but gradually resume to 2/. Majority of staff are worked Terminals as normal
normal. from home
Trucking service is still limited in 1/. Normal in operation
Nanjing Normal operation Normal operation supply, but gradually resume to 2/. Majority of staff are worked Terminals as normal
normal. from home
Trucks from all cities of China are allowed for entry,
only if drivers can pass the health check and stay in Trucks from all over China are 1/. MSK resume work on Mar.1st;
their vehicles. accepted, on the condition that the 2/. CMA/APL/HPL/ONE resume to
Ningbo Normal operation 1. Ningbo National Logistics – Mon to Sun 08:30 until drivers can pass the health check and work on Feb.17th' Terminals as normal
20:00 stay in the vehicle during the entire 3/. Others are mostly work-from-
2. Ningbo Port Southeast Logistics – Mon to Sun 08:00 operation process. home.
until 2:00
1/. CMA/ONE will implement home
office mainly plus office on duty
Trucking service is still limited in
2/. MSK announced all staff work at
Qingdao Normal operation Normal operation supply, but gradually resume to Terminals as normal
home until the end of Feb
normal.
3/. Others carriers are home-office
in majority
1/. EED (WGQ) operates as 24 hours a day. No
limitation imposed on truck drivers as long as they can
pass the temperature checks.
Trucking service is still limited in 1/. Normal in operation Terminals congested owing to
2/. DFJF (Linggang) are resumed to normal operation.
Shanghai Normal operation supply, but gradually resume to 2/. Majority of staff are worked upsurge of import and reefer
Except from Hubei province, trucks from all over China
normal. from home containers
are accepted, drivers are subject to health checked and
limited in assigned operation area.
3/. Medlog : operating time Mon to Sat 8:30-17:00
02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 10Yusen Logistics Operation:CFS,Trucking,Carriers
Origin Customs Warehouse Truck Carrier Terminal
1/. Normal in operation
Warehouse operation is normal, 1 day Trucking service is still limited in supply,
Tianjin Normal operation 2/. Majority of staff are worked from Terminals as normal
reservation in advance is needed. but gradually resume to normal.
home
Most of the main carriers are resumed
Normal operation but in Resume to work NO earlier than Mar 10th Resume to work NO earlier than Mar
Wuhan in form of work-from-home since Feb On duty staff arranged
low efficiency 24:00 10th 24:00
3rd
1/. Normal in operation
Trucking service is still limited in supply, Terminal congested due to
Xiamen Normal operation Normal operation 2/. Majority of staff are worked from
but gradually resume to normal. too many empty containers
home
1/. Normal in operation
Trucking service is still limited in supply,
Shenzhen Normal operation Normal operation 2/. Majority of staff are worked from Terminals as normal
but gradually resume to normal.
home
Italy Normal operation Normal operation Normal operation Normal in operation Terminals as normal
South Korea Normal operation Normal operation Normal operation Normal in operation Terminals as normal
02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 11Market Update Airfreight
Sea-Air mode
▪ A solutions could help shippers to avoid airfreight shortages and price spikes as production lines in China soon get
back underway.
▪ Ocean transport to move the goods to a transshipment point, before flying to destination, could prove attractive
for semi-urgent shipments that want to avoid any airfreight price surges or space shortages, but can’t afford to
wait for long before arrival to the consumption markets .
▪ Singapore is around 10 days quicker than the traditional air-sea hub of Dubai, adding value and speed.
Source : https://www.aircargonews.net/airlines/sea-air-solutions-set-to-help-alleviate-coronavirus-capacity-crunch/
Shortage of capacity
▪ About 70 airlines have canceled all international flights to mainland China, and an additional 50 have curtailed
operations, resulting in an 80% reduction in foreign airline capacity and a 40% reduction by Chinese airlines.
▪ American Airlines, and United Airlines suspended service to China and Hong Kong until late April, while Air
Canada, British Airways and Finnair extended flight suspensions to mainland China until late March and cut more
flights to Hong Kong.
02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 12Potential Impact To be Considered
Production Space and Equipment
▪ Late opening of factories may result to manufacturing and ▪ Slow booking release or response from carrier as work from
delivery delays. home or booking agent team not in full force.
▪ Parts and material packaging availability severely impacted ▪ Port congestion.
within the lockdown cities. Not all establishments and
authorities are officially open. ▪ Container rollovers and possible delay.
▪ Workers shortage as returning workers may be restricted and ▪ Tight vessel space and equipment availability could be
subject to 14 days quarantine. Public transportation is also expected once production resumes normal as cargo readiness
limited. are all at the same time.
▪ Limited air cargo space due to suspended flights.
Transportation
▪ Intercity transportation might be limited due to entry and exit ▪ More blanked sailings and increased freight rates
measures implemented by various cities
▪ Inland transit time could be longer due to road blocks and
checkpoints.
▪ Possible drivers shortage and truck supply.
▪ In some provinces, barge and feeder operation has been
suspended. Trucking service is very difficult to arrange and
therefore significant price increase is expected.
Copyright © 2020 Yusen Logistics. All rights reserved 13Disclaimer : Yusen Logistics does not control nor guarantee the accuracy, relevance, or completeness of the information found herein. Any hyperlinks from this circular, exists for information purposes only and are meant for your convenience. 02 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved 14
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