The BOC Blast 351 – UPDATE Coronavirus – COVID-19 Origin Operations

UPDATE: Coronavirus/COVID-19 Origin Operation

Over the past week or so, the China government has reportedly lowered COVID-19 emergency response levels in some provinces, allowing workforce back into production. Return-to-work restrictions/requirements from the Chinese local authorities and some office building management teams remain in place.

A larger portion of our colleagues in China have returned to the offices, and the team is strictly following precautionary measures. While some teammates are working from home, we are operationally ready to manage business as normal:

Shanghai, Ningbo, Taiwan and Hong Kong: 100% of the teams are working in the office. 

Qingdao: 90% of the team is working in the office, with 10% working from home.

Shenzhen: 60% of the team is working in the office, with 40% working from home.

Xiamen, Fuzhou and Tianjin: 50% of the team is working in the office, with 50% working from home.

Dalian: 40% of the team is working in the office, with 60% working from home.

We continue to work with the relevant authorities to bring the full team safely back into our offices.

Other Market Developments

Drayage in China:  Cross-border trucking between China and Hong Kong continues to run, but it is highly recommended that bookings are made at least 2 days in advance to ensure driver availability. 

Availability of inland trucking in mainland China remains limited, advanced bookings of at least 2-3 days are required to secure trucking services.

International Air and Ocean Freight:  Production and export volumes from China have increased as the workforce returns, and demand for airfreight space, particularly to the rest of Asia, is picking up. There are also indications that ocean freight shippers are looking to switch modes in a bid to ‘catch up’ on schedules, further accelerating the demand for airfreight.

We are not expecting a quick reinstatement of cancelled airfreight capacity on both freighter and passenger flights outbound China, which we estimate to be well above 30% of last year’s global capacity (50% to the US, 50% to Asia, 35% to Europe), particularly passenger flights, as many countries maintain advisories against travel to China. At this point, we anticipate that airlines will initiate a resumption of capacity no earlier than the third week of March.

Airfreight rates soared on the China-Asia routes as capacity pulled out of this market is most significant, and demand for space has become ‘red-hot’. Air charters are in high demand, but supply is soft as the availability of aircraft and crew remain challenged.

The fallout from COVID-19 is strongly felt in the container shipping market. According to Alphaliner, Q1 2020 volumes at ports in China and Hong Kong are estimated to have reduced by more than 6 million TEUs due to the extended Lunar New Year holiday and COVID-19 containment measures.

Currently, container equipment is sufficient in China, but the availability of Non-Operating Reefers (NOR) is diminishing.

We will continue to update you as we receive more information. If you have questions, please contact your BOC Representative.

The BOC Blast 350 – Coronavirus – COVID-19 Operational Update

Coronavirus / COVID-19 Operational Update

  • Work Arrangements – Our teams are working as much as possible, guided by advice from local authorities to protect the well-being of our staff while maintaining maximum coverage and minimal operational disruption as possible
  • In China, our team is operating either from our offices or their homes, and we have implemented tiered working hours.
  • In Hong Kong, a portion of our staff is working from home while the rest is working from the office.
  • Market Developments
  • Factories in China are gradually resuming operations at a varying pace, a slow ramp-up in production and exports are still to be expected.
  • Drayage in China: Various provinces and cities have imposed restrictions on the entry of non-residents and vehicles registered outside their localities. This has given rise to a shortage and/or rate increase of inland trucking in the mainland China as truck drivers have not been able to return from their hometowns to their work regions post-holiday. Advanced bookings of at least 2 days is required to secure trucking services.
  • Air Freight: A large number of passenger and freighter flights to and from China have been cancelled, severely impacting capacity. Though freighter flights have gradually been reinstated from last week, with demand far outstripping supply, airfreight rates will likely be much higher than normal.
  • Ocean Freight: All Chinese ports except Wuhan are currently operational. However, many container yards have yet to re-open, potentially causing equipment shortages.
  • Global Port Developments

We will continue to monitor the situation closely and provide updates as we have them. Please contact your BOC Representative, if you have any questions.

The BOC Blast 349 – Coronavirus Delays – Update

Coronavirus delaying normal post-CNY trans-Pac flow to March

Bill Mongelluzzo, Senior Editor | Feb 10, 2020 2:57PM EST

Logistics experts predicted Monday that delays in resuming China’s factory production and inland transportation supply chains due to the deadly coronavirus will push the return of normal post-Lunar New Year Trans-Pacific cargo flows to late February or early March.

Furthermore, carriers over the weekend announced an additional 21 blanked sailings, which means that beneficial cargo owners (BCOs) now face at least 82 blankings through February and into March, with additional canceled sailings possible.

Although China’s government initially extended the Lunar New Year factory shutdowns until Feb. 3 for much of China and Feb. 10 for the Wuhan-Hubei province region in a bid to stem the spread of the virus, sources indicated those deadlines have slipped.

“From what I’ve been told, most of the factories may only resume normal working around Feb. 17,” Paul Tsui Hon-yan, managing director of Hong Kong-based logistics company Janel Group, told JOC.com.

Additionally, before factories resume production, they must submit a plan to authorities detailing precautions they have implemented to prevent the virus from spreading. “That means the actual date of resumption of operation could be delayed by a further two or three days,” he said.

The closely intertwined warehouse, trucking, and factory logistics chain is struggling with a shortage of workers, which is delaying the resumption of operations, let alone full production, said Jon Monroe, who represents non-vessel-operating common carriers (NVOs) in the United States and China.

“They can’t get enough truck drivers,” he said. “There are skeleton crews at the factories. Warehouses are closed.”

In past years, many workers in the coastal areas who went to their homes throughout China for the Lunar New Year factory shutdowns returned a few days late. This year, the situation is compounded by a hesitancy among workers to travel on crowded trains amid unceasing reports about the virus and its spread, Monroe said.

Carriers announce 82 blank sailings

Once merchandise begins rolling off the production lines, BCOs will face an unprecedented number of blank sailings from Asia to North America. In this week’s Sunday Spotlight, Alan Murphy, CEO of Sea-Intelligence Maritime Consulting, said carriers have announced 82 canceled sailings into March thus far.

“With increasing announcements in the past 24 hours of factories extending closure periods further, it seems likely that the number of blank sailings might also escalate in the coming week,” Murphy wrote.

Trans-Pacific services from Asia to the West Coast will be the hardest hit by the blankings. “There will be a staggering 62 blank sailings on the Asia-North America West Coast trade lane, 19 of which have been in relation to the coronavirus outbreak,” he said. Carriers have announced 20 blank sailings to the East Coast, 18 of which are due to the Lunar New Year factory shutdowns, and two to the virus, he said.

Global Port Tracker, which is published monthly by the National Retail Federation and Hackett Associates, estimated that containerized imports at US ports in January declined 3.8 percent from January 2019, and will fall 12.9 percent in February and 9.5 percent in March year over year. Global Port Tracker projected that year-over-year increases in imports will resume in April, but the first half of 2020 will still be down 0.4 percent from the first six months of 2019.

In attempting to deliver transportation solutions and work-arounds due to vessel delays, blank sailings, and port issues within Asia, Swire Shipping said in an advisory that 14-day quarantine periods for vessels that call China must be taken into consideration when projecting vessel arrivals in receiving countries. “These restrictions may lead to delays caused by changed rotations or longer transit times,” Swire said.  

Logistics experts emphasized that conditions in China, the rest of Asia, and in the trans-Pacific shipping arena remain fluid, especially for any services touching China, so BCOs should maintain close contact with their transportation consultants for regular updates.

JOC correspondent Keith Wallis contributed to this report.

The BOC Blast 348 – Coronavirus Logistic Challenges

Coronavirus Logistic Challenges

Dear Customer,

For a word to define the current situation, I would use fluid. Typically after CNY, there are some planned canceled sailings due to a lack of volume since the factories close for the normal holiday period. Now with the extended closures due to the Coronavirus, the carriers, both ocean and air, suddenly are canceling additional services that were not originally scheduled to be aborted. Below you can see the JOC article which details some new unplanned blank ocean sailings announced. In regards to air capacity and services, 1/3 of all air freight cargo moves in passenger planes. With almost all passenger services to and from China for the next several weeks suspended, we believe there will be a lack of air capacity and rising air prices until at least the end of March. As some of the factories begin to open on Monday, we have also identified that inland pick up at the Chinese factory is going to be a major issue. Many of the truck drivers who come from outside of the port areas, will not have returned to work due to Coronavirus human mobility restrictions. The human mobility restrictions are overseen by the central China government but the local Chinese municipalities have been granted additional authority to restrict human travel within their own region. We will keep you informed as we get the details but I would plan for potential delays due to sudden changes in service for weeks to come. Transparency and updated information will be the key role we will play and help you pass all the information on to your customers. We will get through this terrible affliction together.

If you have any questions or would like to discuss this further please feel free to contact your local BOC Representative.

Maersk blanks trans-Pacific sailings, citing coronavirus

JOC Staff | Feb 05, 2020 5:40PM EST | JOC – MARITIME NEWS – CONTAINER LINES

Maersk on Wednesday said it was cancelling six Asian service sailings to North and South America due to the extended Lunar New Year holiday triggered by the coronavirus outbreak, and warned that although Chinese port container operations continue, refrigerated plug scarcity is slowing reefer shipments. More carriers operating on the trans-Pacific are expected to follow Maersk’s lead.

The message to customers from Maersk comes after Alphaliner warned that China’s response to the coronavirus and carrier reaction to the extended Chinese New Year holidays will cut the country’s first quarter container volume by more than 6 million TEU. Such a drop will shave 0.7 percent off global volume for the full year.

In its customer notice, Maersk said the backlog of barge operations from Wuhan, the origin of the coronavirus, was easing, and it was working with reefer shippers to mitigate port plug-in power capabilities. Maersk announced the cancellation of the following sailings:

  • Feb. 2 from Kaohsiung on the TP9 to the US West Coast
  • Feb. 9 from Yantian on the TP2 connecting to US West Coast
  • Feb. 17 from Ningbo on the TP18 toward the US East Coast
  • Feb. 7, Feb. 14, and Feb. 21 sailings from Ningbo on the AC3 to the South American West Coast

Alphaliner noted 2M, of which Maersk is a member with Mediterranean Shipping Co., will cancel an additional two China-North Europe sailings in February, and the Ocean Alliance is believed to be blanking three sailings in February on the China-US West Coast trade.

“The full impact of the Chinese coronavirus outbreak on container volumes will not be fully measurable until ports announce their throughput numbers for the first quarter,” Alphaliner noted in its weekly newsletter.

Beijing has extended the Chinese New Year holidays by a week. Factories are supposed to reopen on Feb. 10, but as the number of deaths and infections rises, that date might be extended further. There are also severe travel restrictions in force across most of the country and limited cross-provincial movement, so even if the holiday ends this weekend, the factories’ migrant workforce will find it difficult to get to work.

Beijing has extended the Chinese New Year holidays by a week. Factories are supposed to reopen on Feb. 10, but as the number of deaths and infections rises, that date might be extended further. There are also severe travel restrictions in force across most of the country and limited cross-provincial movement, so even if the holiday ends this weekend, the factories’ migrant workforce will find it difficult to get to work.

The BOC Blast 346 – Airlines Cancel Flights to-from China – Coronavirus

Airlines Cancel Flights to/from China, Coronavirus

Delta, American airlines to stop all China flights as coronavirus crisis grows

Source: https://www.usatoday.com/story/travel/2020/01/31/coronavirus-china-flight-ban-delta-cuts-all-flights-white-house/4620989002/

Delta and American on Friday temporarily canceled all of their China flights in response to the coronavirus outbreak, becoming the first domestic carriers to make the move.

As of Friday, the outbreak had infected nearly 10,000 people, most of them in China, and killed more than 200, all in China.

The U.S. State Department late Thursday elevated its China travel advisory to level 4, recommending that Americans do not travel there. That change followed the World Health Organization’s declaration of a global health emergency over coronavirus.

Tuesday White House officials said they were considering a China travel ban but said then they had not contacted the airlines. Still, if United, the other U.S. carrier serving China with nonstop flights, follows its rivals’ lead, the need for White House intervention may be moot. United has already reduced its scheduled China flights.

American Airlines

American cited the State Department’s updated travel advisory Friday in suspending its U.S.-China routes immediately through March 28. The airline said it would contact the affected customers directly to help them make alternate travel arrangements.

“We will continue to evaluate the schedule for March 28 and beyond and make any adjustments as necessary,” the airline said in a statement.

Delta Airlines

Atlanta-based Delta on Friday said it would suspend its U.S.-China flights from Feb. 6 through April 30.

Coronavirus Grounds Flights to China From 3 Continents. How Scared Should Travelers Be?

Source: https://time.com/5774906/airlines-ground-flights-coronavirus/

Airlines in Europe, Asia and North America are cancelling flights to and from China as the novel coronavirus, which originated in the Chinese city of Wuhan, has infected at least a few thousand people in China and dozens beyond its borders.

Although all 171 deaths from the disease have been limited to China, at least 82 people across 18 different countries have tested positive for the mysterious illness, prompting governments around the world to issue travel advisories and start evacuating their citizens from Wuhan. Chinese authorities have shut down travel in and out of Wuhan and enacted similar, strict transportation restrictions in a number of other cities.

The majority of cases outside China are associated with travel to China and of those, the vast majority involve travel to Wuhan, according to the World Health Organization (WHO).

Which airlines have cancelled flights?

British Airways cancelled all flights to and from Beijing and Shanghai until at least Friday following local authorities’ advice against “all but essential travel to mainland China.” Flights to and from Hong Kong will remain unaffected, the airline said.

British Airways cancelled all flights to and from Beijing and Shanghai until at least Friday following local authorities’ advice against “all but essential travel to mainland China.” Flights to and from Hong Kong will remain unaffected, the airline said.

The BOC Blast 345 – UPDATE China extends Lunar New Year holidays to contain coronavirus outbreak

UPDATE – China extends Lunar New Year holidays to
contain coronavirus outbreak – updated Jan 30, 2020

Update: the Chinese government has extended CNY holidays in China, in order to help keep people safe and contain the coronavirus. A few additional China Cities/Provinces, Guangdong, Fujian, Jiangsu, Shandong, Zhejiang, have extended their earliest permissible dates for businesses to resume operations. The General Office of the State Council said in its announcement that the measure is taken to effectively reduce mass gatherings, block the spread of the epidemic, and to better safeguard the safety and health of the people.

All businesses, including our industry, are mandatorily required to obey the posted closings (below).

Our origin offices in China will resume operations as follows:

  • February 10 – Shanghai, Ningbo, Shenzhen, Xiamen, Fuzhou and Qingdao
  • February 3 – the remainder of China not listed above

Please note that the above list is subject to change according to government announcements that may follow.

In order to minimize operational impact, within reason (whilst keeping in mind the containment of virus outbreak), we have limited staff working from home to attend to bookings / urgent issues where required. This arrangement applies to locations that will remain closed next week. Please note, however, that many companies, such as shippers, are simply remaining closed until the dates listed above, so gathering information and documents is difficult.

Our team in Taiwan resumed work today (January 30), and Hong Kong resumed operations yesterday (January 29), with special arrangements to minimize exposure to the virus (e.g. staff to work from home or flexible hours in office for remainder of this week).

Your understanding and patience is appreciated.

Please contact your BOC Representative if you have questions.

The BOC Blast 344 – China extends Lunar New Year holidays to contain coronavirus outbreak

China extends Lunar New Year holidays to contain coronavirus outbreak

China has announced a nationwide extension to the Lunar New Year holidays as a measure to contain the coronavirus outbreak. The Shanghai municipal government further announced that companies may only resume office on February 10.

The holiday, originally to end on January 30, has been extended to February 2 nationwide.

Our offices in China will resume operations as follows:

  • February 10 in Shanghai and Ningbo
  • February 3 in the rest of China

While Hong Kong officially returns to the office from the holidays on Wednesday, the 29th, we expect some impact to our ocean and air freight operations based out of China.

We will monitor the situation and keep you updated.

Thank you very much.

Please contact your BOC Representative with any questions.

The BOC Blast 342 – Modification to China 301 Tariffs List 4A

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

Notice of Modification of Section 301 Action:

China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation

SUMMARY: In accordance with the direction of the President, the U.S. Trade Representative has determined to modify the action being taken in this Section 301 investigation by reducing the rate of additional duty on certain products of China from 15 percent to 7.5 percent.

DATES: Applicable as of 12:01 am Eastern Standard Time on February 14, 2020, the rate of additional duty will be 7.5 percent for products covered by Annex A of the August 20, 2019 notice (84 FR 43304).

Read the full notice at below link:

https://ustr.gov/sites/default/files/enforcement/301Investigations/Notice_of_Modification-January_2020.pdf

The BOC Blast 341 – New AD-CV Duties Possible on Wood Moldings and Millwork Products

New AD/CV Duties Possible on
Wood Moldings and Millwork Products

A petition filed Jan. 8 alleges that wood moldings and millwork products from Brazil and China are being sold at less than fair value in the U.S. market and that such items from China are benefitting from countervailable subsidies. The alleged average dumping margins are 268.74 percent for Brazil and 289.70 to 361.83 percent for China.

The Department of Commerce and the International Trade Commission will next determine whether to launch AD and/or CV duty and injury investigations, respectively, on these products. There are strict statutory deadlines associated with these proceedings, so affected companies that wish to protect their interests should contact Sandler, Travis & Rosenberg as soon as possible.