Written on the 5 February 2020
While it is impossible to predict the full impact on the supply chain until the end of the extended Lunar New Year holiday when trade resumes, we have listed key information below.
Supply & Production in China:
As you are already aware, numerous provinces have extended the Lunar New Year Holiday until the 9th February with most businesses scheduled to resume on the 10th February.
The extended New Year Holiday will affect production and supply of goods throughout China with factories and trucking still closed.
Wuhan & other cities in the Hebei province are at this stage, in lock-down, which is likely to extend beyond the 9th February in an effort to prevent the spread of the virus.
Travel restrictions are also in place throughout Hebei and until the lock-down is lifted, businesses will remain closed.
Airfreight from China:
Many airline carriers will be ceasing their import and export operations to and from China up until the 1st March to protect staff and passengers from the virus.
Qantas has announced that they have suspended two direct passenger services between Mainland China and Australia. However, the Qantas 747-8F freighter services will continue to operate as normal once the Lunar New Year Holiday period ends.
What does this mean for your airfreight cargo to/from China?
Once production resumes there could be an influx of airfreight to/from Australia as suppliers work to fulfill previous and new orders.
Importers & Exporters may look to airfreight cargo that has become urgent due to the extended New Year period and with reduced flights, there could be a higher demand for airfreight cargo.
This could cause waiting time for cargo to be loaded on flights, offloading due to weight restrictions and longer transit times.
Once the New Year period concludes and trade begins again, we will have a better understanding of how airfreight cargo is going to be affected and will keep you updated.
Seafreight to/from China:
Currently Ocean carriers have not advised changes to their current export scheduling from China to Australia or Australia to China, however, it is expected that there could be cancelled sailings resulting in reduced space on vessels.
This has the potential to cause a backlog of containers in China and there is also the possibility of roll overs and additional waiting time at ports in China for cargo to be loaded and unloaded.
Restrictions on Incoming Vessels:
Effective immediately, restrictions have been confirmed for vessels that have called China and are arriving into any NSW port.
Any vessel that has spent less than 14 days at sea will be denied berthing until the vessel has been at sea for a minimum of 14 days.
For all other Australian ports, it has been agreed that any vessel that sailed China on or after the 1st February will again, not be able to berth unless it has spent a minimum of 14 days at sea.
Ships are routinely required to make a health declaration as part of their MARS pre-Arrival Report and some ports and State Authorities have added a requirement for additional declarations, such as their last 5 ports and the date that any crew members last visited China.
Any reported illness on a vessel will be investigated by Health /BPC officers and if a Coronavirus case is confirmed a second 14-day quarantine period will be ordered.
What does this mean for seafreight importers from China?
Whilst we will not understand the full impact of these restrictions until trade resumes with China it is to be expected that there may be additional transit time for goods sailing from Southern China as the transit time is less than 14 days.
Some vessels will be delayed in receiving permission to berth and may take action such as slow steaming or changing the order of port rotations to extend the transit time to meet the 14-day requirements.
Should your cargo be on board a vessel where a crew member becomes ill or is confirmed as infected with the Coronavirus the vessel will not be allowed to berth for an additional 14-Days which will result in a delay of cargo being available.
No restrictions have been announced for vessels departing from Australia into China as yet however we will update you should there be any developments.
As the situation is ongoing, any information provided is subject to change. We will closely monitor and send through updates as the situation develops.