COVID-19 Latest Updates

Record-High Idled Ship Capacity, a Big Break for Airlines, and Delays Hurting Truckers

By April 16, 2020 No Comments

Ports

The Government of India has extended its lockdown until May 3. The lockdown – originally scheduled to end April 14 – makes minimal exemptions for essential businesses related to food, transportation, and the financial and medical systems. While extreme, these measures have allowed India to maintain a relatively minimal spread of the virus in a nation of nearly 1.4 billion. 

Ports are on guard after last week’s events at a Seattle terminal. After an office worker went home sick, later testing positive for COVID-19, numerous dockworkers refused to enter their gates until offices were sanitized. The time taken to clean the workers’ areas caused the terminal to cancel a night’s shift, making both a financial and a productivity impact. While safe moves and precautions were taken here to avoid a crisis, last week’s events highlight the risk that all ports face as the virus spreads.

 

Air

Cargo-only flights are slowly becoming the new norm on a global scale. The shift in offering has slowly started to reach smaller airlines, with Lufthansa, Austrian Airlines, and others contributing passenger planes for cargo-only flights. Larger airlines have started to expand their air freight reach, with United adding Brussels, Hong Kong, Sydney, Tel Aviv, and others to its cargo network. United Airlines reports that it has already operated more than 270 cargo-only flights, carrying more than 9.2 million pounds of freight on repurposed Boeing jets. 

Delta Airlines recently published a schedule of additional international cargo flights that it will be operating, although they make clear that the schedule is subject to change as the demands of the pandemic continue to shift. Over half of the routes added have Canadian destinations even as tensions grow between the governments of the U.S. and Canada. 

Finally, after weeks of discussions, major U.S. airlines have reached a $25 billion bailout agreement with the Treasury Department. Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines will all receive funds, some in the form of loans, to help pay employees and keep their businesses operational through the end of September. The terms of the agreement, requiring the airlines to retain all employees and maintain their pay and benefits, will fund about 75% of the payroll for some 750,000 airline employees throughout the U.S.

Ocean

As the impacts of the economic slowdown caused by COVID-19 grow, the shipping industry is bracing for the “worst capacity crisis the industry has ever seen,” according to Alphaliner. Estimates anticipate a record-high idled ship capacity, reaching 3 million TEU. With more than 250 blanked sailings so far in the second quarter, it’s not just the main Asia-Europe lanes that are seeing major impacts. Lanes on the Transatlantic, Latin America, Middle-East, Indian subcontinent, Africa, and Oceania regions have all seen dramatic capacity fallout. Ports around the U.S. are reporting similar drops in container volumes, reflecting a staggering slowdown in trade across the board.

Trucking

While capacity seems to be the biggest cause of disruption for other modes of transit, trucking is facing a different kind of challenge. So far, trucking capacity has been plentiful and hauls have been moving faster than ever with reduced traffic on roadways and reduced restrictions for drivers. However, drivers are facing huge delays when they reach customers and consignees who are grappling with reduced workforces. Docks are becoming major supply chain bottlenecks, causing drivers to spend countless hours waiting for assignments and unloads. While that can mean detention charges for the customer, it can also mean huge amounts of lost work hours for drivers. For now, the best cure for the backups is clear visibility and collaboration between parties, allowing for coordination that saves precious time and money.

Aid

The Export-Import Bank of the United States (EXIM) voted unanimously to exclude PPE and medically necessary cargo from insurance coverage and financing. Taking guidance from the federal government, the organization is seeking to keep these goods in the domestic market in hopes that decreased exports will bolster the supplies available to the American healthcare system. 

While EXIM is pulling insurance and financial support for exports of PPE and medically necessary equipment, the organization has also extended the duration of the temporary relief measures for exporters and financial institutions affected by COVID-19The relief program – originally slated to end on May 12 – has been extended to May 31. If your business is impacted and would like help exploring your options, don’t hesitate to contact us.

free online tool developed by the American Logistics Aid Network (ALAN) shows supply chain employees and transportation providers a national map of where COVID-19 is impacting roads, airports and ocean ports. ALAN has indicated this site will remain in operation until the pandemic subsides and the impact to the supply chain dissipates.