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17th March 2020

COVID-19 Updates

We would like to share our latest update on the Covid-19 virus, which has now extended to 142 countries.

China

General Status

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.

Production

Our in-house survey of ACS shippers now has 60% of factories back to full production.

Local Transportation

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.

Equipment Shortages

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.

Air Freight

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.

North China

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.

South China

Capacity is available with 5 freighter services available per week. These come at peak rates.

Hong Kong

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.

Korea

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.

Singapore

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.

Other Origins

We have been notified of reduced capacity from India, Vietnam, Cambodia and Mauritius. Details still to be finalised

Continental Europe

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.

Turkey

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.

UK

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

UK airports are currently operating normally but the traffic is much reduced.

UK Ports

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.

UK Warehousing

We have both chilled and ambient warehousing space available in the UK.

Chilled

The Midlands – 6,000 pallet spaces

Ambient

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.

UK Exports

Sea

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.

Air

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*

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