CORONAVIRUS COVID-19 UPDATE
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Coronavirus Covid-19 update
Further to our broadcast at the beginning of February, there are positive reports coming out of China from our partners, customers, suppliers and Industry sources as workers return to offices and factories.
Whilst many Chinese manufacturers are reportedly operating at much lower capacity (25-50%) than normal and some still remain closed, TCF can report that we have started to receive bookings and communication from suppliers to arrange to collect shipments from Chinese factories for export.
February’s closures and strict quarantine measures in China has had a major impact on our customers that purchase from China. Volumes are 40-50 down on the same period last year and with the reports that stock levels will dwindle quickly until manufacturing catches up, the projections for March are that whilst some manufacturing has started, full operations are 4-8 weeks away. Whilst is some provinces it is still a challenge to find transport and truck drivers, this piece of the logistics chain is starting to improve.
TCF’s partner offices in China and Hong Kong are all back to work at 100% capacity, with the exception of Wuhan which remains closed. Some workers are still working from home due to the cold weather conditions and the inability to heat offices with bans on using building Air conditioning systems.
Shipping lines and vessel sailings are reported to be back to normal although many airlines are still halting flights into and out of China with limited capacity. Airfreight shipments remains a huge challenge for everyone. We have received unconfirmed reports that the surrounding highways and road network in Shanghai and around the airport may be opened and back to normal by the end of the month, No formal information has been received on this however.
Pricing increases look inevitable with the shipping lines already advising of General Rate Increases (GRI) for April and Airline Freight rates more than double the per kilo rates obtained in January in some cases. With pricing traditionally set to drop over the coming months, it is becoming more likely that increased production and demand, reduced capacity of equipment (empty containers in China) and huge losses incurred by shipping companies and airlines alike, that we will see unprecedented increases over the coming months or at best pricing remaining at higher than normal levels for Australia’s winter months. TCF will continue to monitor the pricing and capacity situation in an effort to provide information as quickly as possible.
Australian Border force continue to operate and enforce the same quarantine regulations issued in early February relating to incoming vessels. Nothing further at this stage has been implemented.
I am sure that most of you are communicating with your overseas suppliers, regardless of their location, and querying the effects they are feeling of the China quarantine measures. A lot is still unknown regarding the effects on the global supply chain outside China, but news agencies and industry bodies as well as our partners in the United States, Europe and Asia are reporting that March and April will see supply delays and stock shortages due to the inability of manufacturers in these countries to source the raw materials that originate in China.
We will continue to monitor all communication links with our partners, vendors and customers in order to stay up to date with daily changes that relate to the effects on supply chains and endeavour to relay this information to our customers as quickly as possible
Please find attached further information recieved this morning from John Park - Head of Business Operations, FTA / APSA
Should you have specific requirements or questions that relate to this notice, please contact your local TCF International office.