Impact of Coronavirus on International Shipping
We’ve received a number of questions about the impact of the coronavirus outbreak on international shipping. Here is what we know at this time:
1.) Air freight
A number of airlines (United, American, Delta) have suspended all service to and from mainland China. Other airlines are also starting to suspend various flights to and from China. As the number of suspended flights increase, we expect air freight space and rates to become very volatile. Some airlines have maintained their flights to and from Hong Kong.
2.) Ocean freight
Traditionally, demand for ocean freight is light in the first few months after the Chinese New Year. Due to the coronavirus outbreak, we have heard that many factories could take months to get back to full working capacity. The ocean freight carriers are foreseeing a very soft first quarter. There is an expectation that carriers will pull out vessel capacity in response to expected low demand.
3.) Factory production in China
The Chinese government has extended the Chinese New Year holiday across China through February 2nd to encourage people to stay home. Several larger municipalities (Shanghai, Ningbo, Shenzhen – Guangdong, Xiamen, Fuzhou, and Qingdao) have further extended the holiday through February 9th. Factory production of goods is expected to be severely delayed as workers will not be returning to work until much later than anticipated.
4.) U.S. Customs
U.S. Customs has not indicating that they plan to hold air or ocean shipments originating from China due to the coronavirus.
The situation is very much in a state of flux. We will keep you updated of any significant changes.