Coronavirus update, 11th March

The supply chain situation in China improves daily and Chinese factories are increasing output, but issues continue to hamper the backlog of factory orders and while ports and terminals are operating as normal, with the unprecedented level of blank sailings, it will take time before the buildup of containers at terminals and inland depots can be cleared.

Coronavirus – update 11.03.20

Worldwide confirmed cases – 121,656; China total cases 80,790 – 66.4%
Worldwide deaths – 4,382; China deaths 3,158 – 72.1%
Total number of countries affected – 121

Business Continuity measures as Coronavirus spreads outside China

Metro Shipping

To ensure that we continue to support our customers, safeguard the welfare of our staff, and maintain our regular operational capacity, Metro has implemented the following measures:

• Comprehensive review of business continuity plans to ensure operational capability is maintained in the event of a localised outbreak
• Evaluation of home-working options to support remote working
• Review of internal and external meetings, and the reduction of non-essential travel
• Updating of staff and customer contacts to ensure effective dissemination of urgent information
• Reinforcement of infection control best practice to staff and visitors, to minimise risks associated with the office environment
• Reinforcement of travel guidance and absence management for our staff, to ensure we are proactively advised of any potential issues and take effective mitigation actions

Metro customers and suppliers

• A number of our customers and suppliers are advising of new site safety measures they are implementing in their offices, manufacturing facilities, distribution centres, etc.
• If your organisation has implemented any measures which may impact drivers, container loading, or similar logistics activities it would be appreciated if you could share these with us
• Drivers may be asked to complete screening questionnaires, or required to undergo temperature checks when arriving on site
• We will ensure this information is shared with all relevant parties to minimise any non-compliance, delays or wasted journeys to your sites

Ocean Freight

• There are signs of recovery in China, with manufacturing reaching 60-80% of pre-Chinese New Year levels in most regions; road transport is picking up as truckers return to work, enabling goods to reach ports; reducing levels of blank sailings will support increased cargo capacity
• There will be a period of readjustment given the multiple and complex challenges; order backlogs driving up demand, raw material shortages, repositioning of equipment, record levels of inactive fleet and congestion at ports; inevitably bottlenecks will take time to clear
• Carriers will be looking to increase revenue to offset the impact of the Coronavirus on Q.1 performance; despite early signs of recovery, carriers will aggressively look to bolster revenue by pursuing peak season surcharges (PSS) and rate hikes
• We continue to monitor market movements to assess the extent and impact of rate increases and surcharges, as the anticipated rate volatility is likely to endure for a period of time
• With outbreaks across Europe and more countries taking stringent measures to control the spread of Coronavirus, there will be repercussions on the flow of cargo within and across key Europe markets
• A major ports operator, Peel Ports Group, has today announced the implementation of strict procedures for all incoming vessels, including Declaration of Health statements; failure to provide the required information will result in entry refusal and isolation protocols; similar measures may be announced by other ports in the coming weeks

Road haulage

• The national lockdown across Italy and other virus hotspots on the European mainland have imposed new imperatives on road haulage activities
• Whilst the measures in Italy have effectively stopped the movement of people, goods are still being transported However, with additional checks on drivers it is expected that delays and longer transit times will be inevitable

Air Freight

• Our Sea/Air option via Singapore has enabled a number of customers to maintain priority shipments out of China; for further details please contact Grant Liddell, Business Development Director, grant.liddell@metroshipping.co.uk
• As Chinese manufacturing output recovers, the rush to move goods out of China is driving up air freight demand whilst the supply of capacity remains extremely limited
• For flights leaving China, cargo rates have seen unprecedented increases of 200-300% and more, in extreme cases; these rates mean that air cargo may only be a realistic solution for higher value goods, whilst alternative routes and modes will become the best option for other products
• Most major airlines have suspended flights into April and May; the changing picture outside of China now drives renewed focus on further constraints impacting passenger and cargo air services

The only constant in the current climate is ever-changing dynamics of a global epidemic, the likes of which we have not seen in modern times.

As the Coronavirus becomes an ever-increasing factor outside of its origins in China, we recognise the new and unexpected challenges for both our customers and our partners.

Accurate forecasting, proactive management of capacity, and the ability to deploy market-leading insight and intelligence will ensure that Metro continues to support you with the challenges of the current logistics environment.