We have received further updates over the weekend from our teams in Asia and Europe as their business and commercial environments react to the COVID-19 outbreak, which has now been reported in 89 countries.

Asia

The Mainfreight team in China has advised that sea freight operations are largely returning to normal, although delays continue to be experienced, and are expected to persist for several weeks yet.

Our new branch in South Korea has reported that all organisations with 500 or more employees have been advised to encourage team members to work remotely. All other Asian countries have banned Korean travellers, resulting in a large number of cancelled passenger flights.

The Mainfreight Japan team has shared that while over 1,000 infections have been reported in Japan, business in general, including our 2 Japanese branches, are operating as usual.

Air freight ex China to New Zealand

As detailed in our market update late last week, demand is increasing quickly for air freight space ex China to all parts of the world, including New Zealand.

With all direct flights now cancelled, or severely reduced, we are reliant on transhipment routes through other Asian and Middle Eastern hubs to reach New Zealand.

This has resulted in the upward pressure on rates we have previously highlighted to increase, with effective rates at the time of writing in a band between USD7.00 and USD10.00 per kgm ex Northern China and USD5.00- USD7.00 ex Southern China.

It is important for all customers that both regularly use air freight ex China, and those looking at it as an option in the current situation, to factor rates at this level into their planning.

Europe

Our team in Europe has shared the following update from the Mainfreight Italy team:

  • Our Mainfreight office in Milan is 100% operational, although the team will be largely working remotely from today.
  • Hospitals are under pressure, but coping to date.
  • Schools, university, cinemas, theatres, gyms, and public pools are closed until April 3rd.
  • Restrictions have been put in place for restaurants and hospitality establishments.
  • American Airlines and Delta have suspended direct flights between Milan and North America until the end of April.
  • Singapore Airlines and Korean Air have suspended all passenger flights from Milan until the end of May.
  • All other major airlines have reduced the number of flights from/to Milan.
  • All major sea ports are working as normal.
  • Large organisations domiciled in northern Italy have asked all employees to work remotely.
  • Sales calls and meetings have been largely cancelled or moved to video calls.

It remains unclear how the measures put in place by the Italian government overnight will impact transport and freight movements. The 14 provinces included in the quarantined area in the north of Italy are home to 16 million people, and a lot of suppliers to our customers in New Zealand. As soon as we can get clarity on the immediate and forecasted impact, we will provide advice.

Outside of Italy, we are seeing more instances of cancelled meetings across continental Europe. Businesses seem to be largely operating as normal, albeit with team members encouraged to work remotely.

All Mainfreight sites throughout the other 10 European countries we operate in currently, are operating as normal, with our teams healthy and comfortable working onsite.

Ports in Europe continue to operate as usual, although the previously reported equipment shortages are occurring in certain areas. As the shipping industry manages congestion between Asia and Europe, there is an expectation that rates will increase, and/or that Peak Season Surcharges will be introduced.

We expect further announcements and changes as the COVID-19 situation develops globally, so it remains important for our customers, their suppliers, and export customers offshore, to work closely with local Mainfreight teams to secure a freight solution.

Our teams across New Zealand, China and Hong Kong, South East Asia, Japan, Europe and the Americas, will continue to provide as much detail and guidance as we can throughout this period. If you have any questions please do not hesitate to contact your local Air & Ocean branch.

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Mainfreight Limited published this content on 11 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 March 2020 01:39:06 UTC