COVID-19 Updates

We would like to share our latest update on the Covid-19 virus.

Ocean Freight:

Asia – Europe Trade / General Market Overview

Again, as per previous reports (and from our own forward forecasting), volumes continue to increase significantly week on week for the Asia–Europe trade. The Volumes in August 2020 are now comparable to that of last Year, a trend that is set to continue for September in the lead up to the China Golden Week holidays in October. Despite this, carriers remain unlikely to reinstate more capacity than they need in Q3 and, according to various news/ data sources, still intend to blank circa 17% of Asia-Europe capacity during September and beyond.

From the carriers’ perspective there is concern that the unexpected demand recovery could disappear, with mid-term visibility remaining “unclear” (according to some carrier sources). Contrary to this, with carriers running at around 10% less volume than a Year ago, compared with a 20% or so contraction during the peak of the of Covid-19 lockdowns, some see this as strong evidence of the carriers continued success in capacity management. To give an example; ONE Line (of THE Alliance Consortium) average vessel utilisation reached 96% between April and June – significantly higher than the 87% achieved during the same period of 2019.

With this continued volume surge for July & August, shippers from Asia to North Europe are now enduring a sever capacity crunch, culminating in what can often be a three-to-four-week delay for FAVs (first available vessels) to North Europe. Sometimes longer for the UK. This in-turn has led to the Shipping Lines application of mid-month August rate increases as well as the announcement of Peak Season Surcharges. The majority of the carriers’ Peak Season Surcharges will be applicable from the 1st September – however – some Shipping Lines have looked to apply this from the last 1 to 2 weeks of August. The level of PSS varies depending on carrier @ circa $100 – $150usd/ TEU.

Despite the midmonth rate increases, as well as the Peak Season Surcharge, the frustration is that this does still not guarantee space on the vessel. There is also a higher demand for those Consortiums offering the quicker transit times to Europe, i.e. the 2M and OCEAN Alliance. The below CMA (OCEAN Alliance) vessel schedule highlights the lack of space / capacity available during July until the end of August. Furthermore, and now compounding the issues, the high export demand from China / Asia (for all trade routes) combined with the slow downturn of imports China / South East Asia has now led to equipment shortages. Initially starting in India / ISC, this has quickly spread to China / SEA (and the high demand areas / China main ports).


Whilst the current market conditions are / remain extremely challenging, ACS are doing our utmost to mitigate any delays to your shipments, using all means available. We are in constant daily contact with the Shipping Lines and endeavour to secure additional space / sailings if and where possible. As mentioned in our previous newsletters; the 2M partners, Maersk and MSC introduced an intermediate ‘sweeper’ service named the ‘Griffin’. This has now been upgraded to a weekly service. Whilst the transit time to the UK is lengthy, we are looking to utilise this as much as possible because despite the increased transit time, this can on occasions be quicker than other routes with the delays currently experienced. It is also understood that THE Alliance is considering reinstating its suspended FE4 loop after its weekly ‘extra loader’ vessel had been fully booked on each voyage. This would reinstate a Southampton call over what is currently London Gateway.

China to USA (Rate Levels)

The Asia – Europe trade is not alone in terms of capacity shortage. Spot freight rates on the North China to US West Coast trade have surged to their highest level ever, despite the restoration of blank sailings by carriers and even the introduction of new capacity. Rates here are now 120% up on their value a year ago to in-excess of $3000 USD.

UK Transport and Operation

As you may have already experienced first-hand, the haulage industry is currently under immense pressure, to a level we have not seen for several years. This is an industry problem & not unique to ACS. The points below will hopefully give some background to this. The downturn in volumes over the last four months resulted in a situation in the industry where everything is near perfect. Little to no congestions at ports / inland depots / roads combined with an abundance of drivers / vehicles led to a situation that has been enjoyed by our clients as it resulted in shorter lead-times & improved on-time performance. We are now seeing volumes returning to those we would expect at this time of year. We are currently delivering more than double the volume we handled in some weeks over the last 4 months. This is, however, a very different environment to pre-COVID19 times. There are numerous factors which have combined to create a “perfect storm” resulting in the challenges we are now facing:

  • Daily delays of up to 4hrs at the main ports.
  • The Port of Felixstowe have reduced all Vehicle Bookings System (VBS) allocations by 20%. They also are suffering staff shortages.
  • VBS slots in Southampton have also become difficult to obtain & the port are shutting down operations for deep cleaning at 05:00 to 07:00 daily – a critical time for achieving on time morning bookings. It is also closed 17:00 to 19:00 for a secondary clean.
  • During the height of the pandemic, all hauliers took mitigating steps to right-size their business. The obvious measure was placing drivers & office staff on furlough, but given the industry’s reliance on assets, the changes went much deeper. This included steps such as off-hiring trailers, reducing their commitments to owner operators / subcontractors & laying vehicles up or even returning them to leasing companies.
  • We have seen several hauliers exit the market & therefore reducing the amount of traction available.
  • Due to delays in port, we are also experiencing numerous train failures on our various Felixstowe services and this article makes reference to “COVID-19 induced slowdown in port throughput”
  • It was announced this week that parts of the main roads in & around Felixstowe that lead to the port will be shut overnight for 24 weeks. A significant percentage of containers are moved overnight.

So, what are we doing about this?

  • Firstly; we have approached all the major ports to give them our feedback & in turn, ask for theirs. Unfortunately, there is very little commitment to resolve these issues from the ports.
  • Secondly; we are seeing some carriers divert ships into other ports, for example London Gateway, where we can take advantage of the lower congestion where it exists.
  • Finally; we are actively working on using other suppliers & committing further to those that we already partner with, to increase our options & reduce our lead-times.

We ask that you please bear with us during these challenging times & request that your warehouse(s) allow as much flexibility as possible with arrival times. Imports of PPE and medical devices or equipment in relation to COVID-19. Further to the article in our last newsletter which covered the extension of VAT relief to imports of personal protective equipment (PPE), the Government has now extended the period for duty relief to 31st October 2020 for PPE goods and relevant medical devices or equipment, brought into the UK from non-EU countries during COVID-19 pandemic. There are restrictions and further information is available by following this link to the Government guidance.

Air Freight:

The Global Covid-19 crisis continues to disrupt the air freight industry. Airlines have introduced staff redundancies as losses are increasing daily.

  • Carriers are still not offering contract rates till further notice.
  • Block space agreements are still not available.
  • Carrier availability has increased but is still dependant on demand.
  • Flight cancellations still occurring due to lack of booked cargo.
  • Global suspension of passenger flights is still in place except for a handful off carriers operating in Europe and Middle East. Until passenger numbers return, schedules will remain limited.
  • Most current movements are transactional, and volumes are way below normal trading conditions.
  • With Q4 approaching, rates are expected to climb by mid-September which is following the normal year end trend.

UK Airports. Import / Export

Inbound + Outbound freight is still flowing through with no disruption. However, volumes are still significantly down.
As the effects of the pandemic continue to be felt by aviation, airlines and UK ground handlers are still operating with reduced manpower and the peak covid-19 surcharges are still applicable by carriers + ground handlers.


The CN market continues to improve. Rates levels spiked in week 30 due to reduced capacity and fleet maintenance during the summer period. Now rates have levelled out and remain consistent. Volumes remain strong but capacity is still tight due to the ongoing reduction in PAX services.


Capacity levels out of PVG remain steady but with PPE volumes continuing to be strong. Rates remain high with ad hoc market rates available.


PAX freighter capacity had increased and is still available throughout Southern China and services are more stable with 5 – 6 days advanced booking required. CAN airport operations are back to some sort of normality but PPE inspections from local customs remain high.


Demand out of XMN has had a steady increase and the lack of capacity is holding rates up. Rates remain unstable, fixed only at the booking confirmation stage.


Capacity is tight ex TAO due to the limited number of PAX freighter options; we are seeing more carriers reintroducing services but on limited schedules. Rates are unstable from this region.


As with all of China, BJS remains unstable regarding rates and services, available capacity restricted due to ongoing passenger flight cancelations. Origin dwell remains close to 5 days and uplift / rate level only confirmed at final booking stage.


Capacity levels are steadily increasing from HKG with BA, AY & MY now operating. Rate levels vary considerably by carrier. Hong Kong Government introduction of Xray charges will increase from 1st September to HKD 0.84 p/kg. Fuel surcharge remains the same at $ 0.70 The e-comm market has again seen a surge in demand and volumes are on the increase.


The situation within India continues to deteriorate with the number of Covid-19 confirmed cases and deaths increasing at record levels. India is still the 3rd worst hit nation behind only Brazil and the US. Localised restrictions and lockdowns are being imposed across all states classified as “red” zones in a bid to try and control the spread. Except for freighter, humanitarian and repatriation flights all international passenger services will remain suspended. Services are improving gradually as more carriers reintroduce PAX freighter options, but rates are fluctuating, and uplift driven by the transit hub approval.


Capacity is very limited due to the pandemic situation as BD Civil Aviation Authority is not allowing several carriers to land in Dhaka. Space is being utilised with ad hoc freighters and carriers which are allowed with existing schedules. At this point it is not possible to forecast as to when pax flights will return.

Sri Lanka

Capacity remains limited out of CMB with PAX services still suspended. There are more Middle East options opening with QR, EK, TK all operating regular freighters. Rates are still at high levels with volume figures at minimums. PAX services are still suspended.


The situation in MRU continues to improve and the country has now fully reopened. No new Covid-19 cases reported over the last 3 months. Capacity levels are up and down with PAX services still on hold.


Both LHE & KHI airports are now open for carriers but with limited schedules, the market is starting to open but all under government restrictions. No change in the overall situation, but carriers are still working on reduced ad hoc schedules and gauging the market before increasing any capacity.


Although stable now and expected to remain this way through August, there are indications that the Korean market will see “peak” conditions from early September. There isn’t a view yet on what rate levels will look like but as demand increases levels are expected to start increasing from week 36 – 37. Capacity ex ICN is starting to increase as more carriers reintroduce both freighter and PAX freighter schedules. There has also been an increase in PAX services to specific destinations with approx. 30% of passenger services returning to some sort of “normal” operations.


No significant change in the SIN market over the last 5 – 6 weeks but there are early signs of the local situation improving and rate levels appear to be moving in the right direction. Capacity remains limited in and out of SIN, EK / AY services have resumed and SQ has again increased the number of UK flights.


Overall, the VN market has been stable but as carriers continue to reduce or cancel services, capacity is at a premium and reflected in current levels. Current dwell for uplift stands at 4 – 7 days. Certain restrictions are being lifted in Vietnam, but the airfreight market remain critical and unstable.


Although all International passenger movements are still suspended PNH airport is operating normally. PAX freighter services are increasing as is available cargo and as a result rates have levelled out in August. This again is not at traditional levels. Passenger services remain suspended in and out of PNH, but airport operations are running normally with regular freighter services. European trade agreement on the GSP scheme with Cambodia has been suspended on various commodities. Duty charges will be applicable.

Other Origins:

Space and capacity are available on ad hoc. Rates are fluctuating and are normally confirmed once carrier booking is achieved. Please contact your client manager on any ad hoc enquiries.

Road Freight

In Mainland Europe we continue to operate as normal currently and there are no border delays throughout Europe. Scheduled transit times are being maintained. Services ex Turkey and North Africa remain unaffected, with FTL’s departing daily and groupage twice weekly. Likewise, in Central and Eastern Europe.


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