Fear and panic are what kicked off 2020 as a new coronavirus spread from the Hubei province in China. Officially called Covid-19, this new strain of coronavirus has rapidly spread to over 50 countries, infecting over 90,000 individuals and sending some countries into lockdown procedures. Across the world countries are scrambling to contain and control the spread of the virus to protect their people and their economy. Covid-19 is continuing to cause significant damage to the global economy both on a personnel level and an economic level. China has long been considered the ‘world’s factory’ and the country is responsible for the production of not only final products but also components that are necessary in the assemble of products worldwide. To date several big companies including Apple and Hyundai have revised production output forecasts sighting bottlenecks in the supply chain. With global events being cancelled and millions being asked to stay indoors, how will Covid-19 impact the global and Australian shipping industry? Let’s take a look with our recent Coronavirus Update on Global Shipping Industry.
- For the latest information on covid-19 shipping delays and how it might affect your business’ cargo requirements over the coming months. Get in touch with us at ICL International. Our dedicated air freight forwarder and sea freight forwarder team are happy to talk you through the best ways to mitigate the current shipping risks associated with Covid-19.
Coronavirus Global Economic Impact
It is still too early to ascertain the full effects of the coronavirus global economic impact and how this will affect the shipping and logistics industry in the short and long term. As the virus continues to spread across the world and governments worldwide impose strict quarantine measures to curb the spread of the virus, the economic impact will no doubt be at least in the tens of billions with some estimating it to be over $1 trillion. As China continues to contain the virus and its workers return factories and the economy jumpstarts itself, trade to and from China will continue to recover over the coming months. In the short term, businesses should expect covid-19 shipping delays and coronavirus port delays worldwide and allow additional time for freight to reduce the risk that the Covid-19 will have on their supply chain.
Effects of Coronavirus on Australian Freight Industry
China is Australia’s largest trading partner, in terms of both imports and exports; Exporting 30% of its total trade to China valued at $123.3b, more than double that of its next largest trading partner, Japan. In terms of imports, China accounts for $71.3b and 25% of Australia’s manufactured imports come from China. As such close and significant trading partners there will no doubt be significant short-term economic effects of coronavirus on Australian freight industry. As part of Australia’s containment efforts, a series of quarantine measures have been put into place to reduce the risk of Covid-19 spreading in Australia. For the latest advice on the coronavirus and the Australian shipping industry as a whole please refer to the Maritime Industry Australia website.
Exports to China
Reports have come in from China that their ports are running at full capacity, however the bottleneck is currently their land infrastructure. Logistics companies in China have not fully returned to full operations due to the lockdown of several major cities and the extended Chinese New Year currently imposed. It is estimated that the logistics industry is currently only running at 3/5 capacity and significant delays are expected in the movement of containers to/from ports in China. Australian businesses exporting time-sensitive, or temperature-sensitive cargo should take extra precaution as there have been reports of insufficient power facilities at Chinese ports for refrigerated containers. In some cases, some vessels heading to China have even been redirected to Hong Kong due to coronavirus port delays causing a build-up of containers at port. Containers that have been redirected to Hong Kong are then forwarded using land transportation which could potentially increase shipping costs on cargo.
Coronavirus Vessel Quarantine for Sea Freight Imports
Vessels arriving in Australia from China may be subject to coronavirus vessel quarantine depending on the arrival port. As a blanket rule all personnel on vessels that have departed from China are subject to a 14-day quarantine period from the day the vessel left China. Tasmania, New South Wales and Queensland ports have taken these measures a step further by requiring the entire vessel to be quarantined for 14-days at sea and not just the personnel on board. With these quarantine measures in place businesses should expect coronavirus port delays while vessels remain quarantined at sea.
Reduction in Air Freight between Australia and China
To date, eleven major airlines have scaled back or completed ceased flights to and from China between February and March, severely affecting air freight between the two countries and causing significant Covid-19 shipping delays. Limited capacity has reduced air freight availability on these routes and companies wishing to ship via air freight should get in touch with us as early as possible for all their air freight forwarding needs.
Covid-19 Related Freight FAQs
Are there Covid-19 import delays into Australia?
Imports from China are continuing, albeit at a slower pace than usual due to quarantine measures in place by the Australian government. Personnel on vessels must be on the ocean for a minimum of 14 days prior to making port in Australia after they leave China. Some Australian states are imposing a vessel quarantine for 14 days rather than just personnel. With this quarantine in mind, businesses should expect Covid-19 shipping delays in receiving goods from China by sea freight.
Are products imported from China safe from Covid-19?
Scientists have so far found that the virus is said to be able to survive on surfaces up to several days. Vessel quarantine of 14 days should be more than sufficient to ensure the safety of imported products from China.
I am unable to get in touch with my Chinese supplier, what should I do?
Your supplier in China may have not returned to full operation yet or may be suffering from a staffing shortage due to the Covid-19 outbreak. Try all forms of communication you have available and get in touch with us at ICL International as we may be able to provide shipping related updates on the situation.
When will the shipping situation return to normal?
At this stage it is too early to tell, however as factories in China come back online and China continues to contain the virus spread, the logistical situation in China will continue to improve. As an estimate, conditions on the ground in China should start to see activity slowly return to full capacity from the middle of March and further improve into April.
Will my container get stuck at a Chinese Port?
While there have been reports of containers spending prolonged time at Chinese ports due to the lack of ground transportation facilities in China, this is on a case by case basis. Please get in contact with us for the latest information regarding your destination ports.