Are You and Your Ocean Carriers Prepared for Supply Chain Disruptions?

Written by Karl Francisco
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Those persons, cities, and countries feeling the impact of the novel coronavirus outbreak are in our thoughts and we wish for a quick solution and an end to the associated suffering.

With the novel coronavirus continuing to spread rapidly in mainland China, factories have remained closed for an extended holiday period. Ocean carriers have announced several additional post-holiday voided and blank sailings due to the dramatic decline in shipping volumes coming out of China.

Preliminary estimates by Alphaliner indicate China’s response to the coronavirus and carrier reaction to the extended Lunar New Year holidays will cut the country’s first quarter container volume by more than six million TEU, and shave 0.7 percent off global volume for the full year. And 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.

Refrigerated (reefer) container congestion is worsening in Chinese ports. For example, the port of Shanghai has exhausted reefer plug availability with containers waiting to be picked up for delivery to multiple Chinese destinations. As a result of this bottleneck, incoming containers may be discharged in an alternative port without notice and, subject to availability, be on-forwarded to the original intended port of destination. Carriers such as Maersk and Zim are announcing a USD $1000 congestion surcharge per container for all reefer cargo arriving into Shanghai and Xingang. Until the Chinese work force and trucking companies are back at work, this situation may not resolve itself anytime soon.

Carriers continue to divert cargo to other Asian ports; South Korean shipyards are now clogged with containers intended for Chinese ports. Incheon Port Authority indicated the container storage yard utilization ratio of four container terminals was at around 80 percent, up five percent from the average figure in recent days. The Port Authority also stated that it will temporarily create two container storage spaces in Incheon New Port for 14,400 TEU and a space for 850 TEU in South Port.

With this complex situation continuing to evolve for China’s export and import cargo, it is critical to work with all of the parties involved in your supply chain.

Here are just a few supply chain-related considerations:

  • When will your factories be open again?
  • 您的工厂何时复工?
  • When will you begin to ship?
  • 您的货物何时出运?
  • What volumes do you expect to ship each week?
  • 你预计每周出运的货量?
  • What will the immediate future in terms of production look like from your factories?
  • 您的产线是否能立刻恢复到年前状态?
  • Do you have deadlines to meet with your customers at destination?
  • 您对目的港客户的承诺交期能否满足?
  • Are there special handling requirements for your cargo? Out of Gauge or Hazardous etc..
  • 您的货物是否有特殊运输需求?例如超大尺寸或者危险品等?

Working closely with your logistics partner is, now more than ever, crucial for minimizing delays in your supply chain. At the moment, all steamship lines and terminals are operating, with the exception of the port in Wuhan.

We will continue to communicate our daily updates on the coronavirus situation via our operational impact posts on our website. Please reach out to your local Expeditors representative should you have any questions.
我们将通过官网上的 operational impact posts 持续分享每天的动态及新闻。如果您有任何问题和需求,欢迎随时和Expeditors的各地分公司取得联系,我们将竭诚为您服务。

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Blog was originally posted on February 11, 2020 4 PM

Topics: China, Ocean, Asia, Notable Updates, Coronavirus

Karl Francisco

Written by Karl Francisco

Karl started his career at Expeditors in 1984 when he was hired as a runner in the Los Angeles office. In 1992, he became the Los Angeles Import Manager and in 1994 was promoted to District Manager due to his great attitude, strong work ethic, and management skills. After five years as District Manager, Karl was promoted to Regional Vice President of the Southwest Region where he was instrumental in growing all of the offices in the Southwest region. His unique skills and management style enabled him to effectively mentor each of the District Managers reporting to him. Karl was promoted to Senior Vice President, North America in 2014. In this role, he successfully oversaw the Western United States and the Southern Border region, one of the largest regions of the company, with a continued emphasis on developing and mentoring those on his team. In May 2017, Karl was promoted to Senior Vice President, Global Ocean. In 2024, Karl was promoted to Senior Vice President of Global Air. His thirty plus years of logistics experience, expert management skills, geographical expertise and positive attitude all contribute to his visionary leadership of the Global Air team.

3 minute read