Digital Edition

March 2 2020

Issue link: https://jocdigital.uberflip.com/i/1212645

Contents of this Issue

Navigation

Page 7 of 119

Spotlight 4 The Journal of Commerce | March 2 2020 www.joc.com Infectious impact As the downstream effects of the coronavirus (COVID-19) spread, North American importers are increasingly worried about just how much container shipping rates will rise when Chinese factory output ramps up. As of mid-February, however, container spot rates from Asia to North America and Europe were falling, suggesting that volumes are declining faster than carriers can cut capacity via blank sailings. By Feb. 14 — in addi- tion to the 61 blank sailings on the trans-Pacific as a result of normal Chinese New Year capacity management — 25 additional blank sailings had been announced, up from 21 blank sailings a week before, according to Sea-Intelligence Mar- itime Consulting. On the Asia–Europe trade, the number of blank sailings announced as a result of coronavirus measures more than doubled by Feb. 14 to 22 additional withdrawn sailings. This is in addition to the 44 sailings already blanked due to Chinese New Year. Air freight charter rates are rising sharply on the major east-west trade lanes as urgent cargo shipments to China carrying medical supplies and relief aid fill all available space following the suspension of most passenger flights amid the coronavirus outbreak. The trans-Pacific charter rate for a freighter aircra, usually about $400,000, reached $800,000 one-way in early February. At the same time, chartered air traf- fic pushed up Europe–China rates almost 200 percent in the week ending Feb. 14 compared to the prior week, according to Freight Investor Services (FIS). Huge amounts of belly cargo capacity have been withdrawn from the market due to the suspension of passenger flights to China from around the world, believed to involve more than 70 airlines. That has led quickly to an increase in demand for chartered freighters carrying mostly relief aid and medical supplies. In China, trucking and depot businesses are show- ing a slow and patchy resumption of operations aer crashing to a virtual halt aer the Chinese New Year holiday was extended due to the coro- navirus outbreak that has crippled factory and industrial output. "Trucking capacity is much bet- ter in north China, with around 70 to 80 percent availability as the drivers mainly come from prov- inces in China," one logistics executive told The Journal of Commerce. In central and south China, the recovery is much slower, with operations only at 20 to 40 percent capacity, as many drivers are from Hubei and surrounding provinces where the epidemic is more widespread. US export spot rates to Asia are beginning to increase as space on vessels leaving US ports tight- ens, and carriers are already warning US exporters that the shortage of empty containers beginning to surface in the US interior will intensify in the coming weeks. A sudden downturn in imports can result in a shortage of available containers to carry US exports. With fewer laden inbound containers unloading in population centers such as Chicago, Minneap- olis, or Columbus, Ohio, there will be insufficient empty containers in those regions to meet the demand from exporters for products such as scrap materials or agricultural commodities. The Journal of Commerce Executive Editor, The Journal of Commerce and JOC Events: Chris Brooks 609 649 2181, chris.brooks@ihsmarkit.com Executive Editor, The Journal of Commerce and JOC.com: Mark Szakonyi 202 872 1234, mark.szakonyi@ihsmarkit.com Managing Editor: Benjamin Meyer 916 716 6272, benjamin.meyer@ihsmarkit.com Associate Managing Editor: Kevin Saville, 212 488 4282, kevin.saville@ihsmarkit.com. Senior Editors: William B. Cassidy Trucking and Domestic Transportation 202 872 1228, bill.cassidy@ihsmarkit.com Bill Mongelluzzo West Coast 562 428 5999, bill.mongelluzzo@ihsmarkit.com Hugh Morley Northeast, Mexico 646 679 3475, hugh.morley@ihsmarkit.com Eric Johnson Technology 213 444 9326, eric.johnson@ihsmarkit.com Janet Nodar Breakbulk and Heavy Li 251 473 2742, janet.nodar@ihsmarkit.com Greg Knowler Europe +44 7976798770, greg.knowler@ihsmarkit.com Turloch Mooney Global Ports +852 9011 9109, turloch.mooney@ihsmarkit.com Ari Ashe Southeast Ports, Intermodal Rail 202 548 7895, ari.ashe@ihsmarkit.com Data Analyst: Marcin Lejk +44 587416270, marcin.lejk@ihsmarkit.com Shipper Engagement Manager: Dustin Braden 646 679 3450, dustin.braden@ihsmarkit.com Senior Content Editor: Alessandra Gregory Barrett, 860 248 5238 alessandra.barrett@ihsmarkit.com Senior Designer: Sue Abt, 862 371 3534, sue.abt@ihsmarkit.com Designer: Bryan Boyd, 908 910 7849, bryan.boyd@ihsmarkit.com Publisher: Tony Stein, 770 295 8809, tony.stein@ihsmarkit.com Sales: Cindy Cronin, Associate Director South East sales, 954 260 6061 Jean Gibbons, Senior Sales Executive West Coast sales, 706 469 7160 John Knowles, Senior Sales Executive EMEA sales, +44 7779974677 Allyson Marek, Senior Sales Executive Northeast sales, 862 754 8012 Alex Remstein, Associate Sales Specialist Reprints/Classifieds/Copyrights, 646 679 3418 Mehdi Smaili, Senior Account Executive Asia sales, +44 7581406491 Judy Welp, Senior Sales Executive Midwest sales, 512 284 2878 For Magazine Subscription Customer Service: www.joc.com/help 450 West 33rd St., 5th Floor, New York, N.Y. 10001 800 952 3839 Vice President, Maritime & Trade, IHS Markit, Peter Tirschwell Executive Director, Media & Events, Maritime & Trade, IHS Markit, Amy Middlebrook Manager, Production, Carmen Verenna Product Manager, JOC, Jesse Case ©2020 The Journal of Commerce — All Rights Reserved For more information, visit our website, www.joc.com. S.O / Shutterstock.com

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - March 2 2020