Shanghai, China: The coronavirus health issue will have significant implications for the logistics sector in the short term with air transport market expected to feel “the most significant direct effects” of the disease, according to a new analysis from Transport Intelligence.
The container sector has also been hard hot. The virus has been causing severe disruption in China. Many container lines have blank sailings on routes into China to avoid the spread of the virus to other ports. These blank sailings along with the shutdown in China also means that in a lot of the cases, containers meant for the Chinese markets are either stranded on board ships, off loaded in alternate locations or sitting in various ports and terminals incurring port storage, demurrage and detention.
Reefer containers carrying perishable cargo are among those exposed to potentially huge losses. MSC says in the event that the situation remains unchanged it may be necessary for them to abandon vessel calls into these congested ports and the reefer containers may need to be picked up from alternate ports at additional cost to the customer including freight, storage, demurrage and plugging charges.
Maersk Line has recommended that customers with cargoes to congested ports like Shanghai and Xingang divert it to other Chinese destinations where plugs are available or to other markets in the region to avoid congestion.
Customers who are insistent on shipping to Shanghai and Xingang have to accept that the routing, transit and delivery time to these ports are not guaranteed and also that they will pay a congestion surcharge of US$1000 per reefer container.
CMA CGM has also implemented congestion surcharge of US$1250 per reefer container for cargoes to Shanghai, Ningbo and Tianjin/Xingang..
Other lines like One, Zim Lines have also implemented US$1000 congestion surcharges due to the terminal reefer plug shortage in ports of Shanghai, Ningbo and Xingang.
Container lines are set to loose in excess of $350m due coronavirus. This comes at a time when global perishable trade volumes has been reported to have grown by 7% in 2019 on the back of strong demand for fresh and frozen foods into China and more than 60,000 TEUs of frozen meat imported into China in 2019. China accounts for 25% of the world’s containerised trade in beef.
