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Dear Clients,

As the world races to stop the spread of the coronavirus, the ongoing disruption to global supply chains, only seems to be increasing daily.

There are plenty of news articles in mainstream media, detailing disruption to major international brands such as Apple, Google and so on. However, it is not discussing the impact on small – medium importers / exporters in particular those based in Australia.

Given this, I wish to share some of the more relevant market information that may impact on your business, in the immediate time frame and potentially for some time into the future.

  • Airline Freight capacity ex China has already reduced by at least 50% globally. With many major airlines withdrawing services (including Qantas). Once factory production gains momentum, space demand will peak and pricing will likely reflect this.

Hong Kong has also seen flight cancellations from airlines such as United Airlines and American Airlines. So as some importers look to by-pass China and move goods ex Hong Kong (as has traditionally been a common route), they will now face potential issues as well.

  • We are hearing that there are ground transportation restrictions in China, imposed by the government. Restricting trucking in various regions, impacting the flow of raw materials and finished goods either to or from major shipping ports.
  • Shanghai & Xingang Ports are at capacity for IMPORT REEFER power points as cargo is unable to be customs and quarantined cleared, due to the extended closure of government departments. Shipping lines are now charging USD1000 congestion surcharges to aid in the management of the situation or requesting clients arrange to discharge cargo at other ports.
  • Shipping lines operating Australian trade lanes, have requested special approval to be void of the standard 30 x days required by law – section 10.41(2) within part X of the competition and consumer act, to announce blank sailings.

Already we are hearing that some services ex China into Australia will "BLANK" their schedule for a 4th week (in a row), if the above approval is granted.

  • Ships traditionally calling 2 – 4 x ports on any rotation in China are now calling several more to cover blank sailings on otherroutes, this is increasing transit times, in particular into the East Coast of Australia.
  • China Government Issued Documents for Customs and Quarantine purpose are becoming incredibly difficult for importers to obtain. Without CHAFTA COO, many Australian importers are faced with increased cash flow demands as duty falls due on items previously duty free.

And importers of goods requiring China government issued quarantine documents such as health or veterinary certificates are facing issues obtaining these, potentially resulting in goods unable to be cleared on arrival into Australia.

  • Information from China is the return to work for the workers in China, is going to be continuously slow. We are hearing via several sources that many workers are reluctant to return to factories due to the fear of travelling via transport such as bus & trains or spending long hours exposed to potential carriers of the virus in factories.

Given this, we highly encourage you to discuss with your suppliers / shippers, how their individual situation is, as it’s a very dynamic and fluid situation.

Finally, one question that seems to continually be asked of Transways, is "Can my cargo carry the virus from China?" To answer this question, we recommend that clients revert back to the Australian Department of Health for the latest information, given that new information could be released to the public at any time.

Kind regards,

Dion Williamson
NSW Branch Manager


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