Coronavirus Effect on Supply Chains

Coronavirus Effect on Supply Chains

The coronavirus disease 2019 (COVID-19) is upending global container volume demand and rippling through containerized supply chains.  That's sending shockwaves to all freight transport modes, from trucking to air cargo. 

The widening impact COVID-19 is having on retail and manufacturing demand is creating the need for two importing speeds. Cargo owners such as apparel and automotive importers want to delay receiving goods for now-closed brick-and-mortar stores and production lines, whereas importers shipping personal protective equipment (PPE) and essential household consumer goods want them faster.  Against that backdrop, carriers, forwarders, port authorities, and marine terminals are warning of a cargo bottleneck if more Western importers fail to pick up containers when they arrive, causing port congestion and inland equipment shortages that will slow down the broader supply chain.

Bookmark this special page for regular updates on how the industry is responding.

News & Analysis

20 Nov 2020
The FMC’s order drew immediate support from organizations representing truckers and agricultural exporters, who have testified about carrier practices they say contribute to port congestion and bottlenecks in the international supply chain.
19 Nov 2020
California agricultural exporters say failing to deliver their products on time to overseas customers can result in buyers attempting to “wiggle out” of contracts that contain firm deadlines.
18 Nov 2020
While not as high as their prior forecast, shippers in the eastbound trans-Pacific should still expect service contract rates next spring above current levels because carriers will continue their policy of tight capacity management, Drewry says.
18 Nov 2020
Shippers forced out of air and ocean trades by limited space and high rates are turning to overland transport from China to Europe, but the high demand is stoking capacity and equipment issues.
13 Nov 2020
Carriers believe inventory replenishment in early 2021 could offset a drop in consumer spending and maintain volume on the Asia-Europe trades.
11 Nov 2020
The world greeted news of a potential vaccine with relief, but the supply chain logistics required to transport doses at extreme temperatures will be daunting.
10 Nov 2020
US imports from Asia increased more than 10 percent in October, with forwarders forecasting only a modest slowdown in growth through January
10 Nov 2020
Ocean Network Express’ forecast for a highly profitable financial year is an example of the incredible pricing power being exerted by the carriers right now.
09 Nov 2020
Retailers say the record peak season of 2020 will be followed by lower year-over-year import growth in the next few months, with the strength of the US economic recovery next year dependent on progress controlling coronavirus disease 2019.
09 Nov 2020
The sustained strength in demand on trades out of Asia is keeping rates elevated and placing container availability under intense pressure.
06 Nov 2020
The Asia-Europe trade is currently in the middle of what should be a traditional period of slow demand, but an extended peak season is keeping ships full and rates elevated.
05 Nov 2020
There is no certainty the current strong demand that is keeping rates up on the Asia–Europe trade will continue past Chinese New Year, something that is starting to be reflected in longer-term rates.
05 Nov 2020
Carriers are concentrating efforts on increasing their share of direct business with shippers, but DB Schenker says forwarders offering a wide range of services will always be in the picture.
04 Nov 2020
Trans-Pacific carriers, including those offering premium services, have been unable to fulfill all of their bookings in recent weeks due to the container shortage in Asia.
04 Nov 2020
US agricultural exporters fear that even if they pay higher shipping rates, carriers will still turn down their bookings because liners can generate much higher revenue by using the containers for US imports from Asia.
04 Nov 2020
Forwarders are having to rebuild their air cargo logistics infrastructure to compensate for significant cuts in capacity as much of the passenger aircraft fleet will remain grounded through 2021.
29 Oct 2020
An October surge in imports from Asia, coupled with rail-related disruptions, are generating delays and excessive container dwell times at the Canadian ports of Vancouver and Prince Rupert.
28 Oct 2020
The Leatherman terminal, along with new retail BCOs and resin exporters, will lead to a bounceback in volume after the COVID-19 pandemic crimped container traffic, the South Carolina Ports Authority said in its State of the Port address.
26 Oct 2020
Although economic forecasts point to a possible weakening in consumer demand, carriers are expected to continue the capacity management discipline they have displayed all year to prevent rate destruction in the trans-Pacific trades
26 Oct 2020
The on-time performance of carriers has declined sharply since a 2020 high in June when large amounts of capacity were blanked
26 Oct 2020
Alternatives to expensive air freight have been available on the trans-Pacific for years, but as space constraints make air cargo an increasingly unreliable option, a new expedited ocean product will soon be launched on the trans-Atlantic.
23 Oct 2020
The strength of third quarter demand and the rate rises generated on the major trades through the peak season can be seen in the revenue and volume growth reported by OOCL.
22 Oct 2020
Asia–Europe demand forecasts for 2021 are becoming increasingly unclear as annual contracts come to an end, while high spot market levels have put shippers on course for significant long-term rate increases.
21 Oct 2020
Union Pacific Railroad will raise the surcharge on small shippers to $1,000 on excess contract cargo beginning Oct. 25, a signal that rail-owned containers remain in short supply on the West Coast.
21 Oct 2020
Limited air cargo capacity and high ocean load factors are keeping demand elevated on the overland rail network between China and Europe.
21 Oct 2020
Europe’s two busiest ports report solid import demand from China through the third quarter, which has helped mitigate the weak throughput of the second quarter.
19 Oct 2020
The congestion that has plagued the ports of Los Angeles and Long Beach over the past two months is expected to get worse in the coming weeks owing to a “record” spike in imports.
19 Oct 2020
Available drivers have been hard to find with such a sudden and sharp rise in domestic and international container flows, placing a great deal of strain on the fluidity of the supply chain.
16 Oct 2020
J.B. Hunt said intermodal results were worse than anticipated because of major network congestion in rail terminals and shippers sitting on containers, which may not ease until 2021.
16 Oct 2020
Analyst Drewry has joined Maersk and Hapag-Lloyd in substantially raising its full-year profitability guidance for the container shipping industry.
16 Oct 2020
Limited air cargo capacity is colliding with strengthening demand, as technology product launches compete for space with general cargo and medical equipment.
15 Oct 2020
Newly released data shows the disruptive extent of unexpectedly high demand on the major trades out of China, with cargo rollovers continuing across Asia’s main transshipment ports.
15 Oct 2020
Europe’s second-busiest container port has reported limited impact from COVID-19 on its nine-month throughput, with demand increasing in the third quarter.
14 Oct 2020
The long run-up in spot market truckload rates and truck freight demand may be reaching its peak, but don’t expect a quick descent, speakers at the Transplace Shipper Symposium said Wednesday.
14 Oct 2020
A huge volume of imports from China that was concentrated mostly in Los Angeles and Long Beach produced a banner month for the Southern California port complex in September.
13 Oct 2020
The sustained recovery of demand across its major markets, combined with effective cost-cutting measures, have driven Maersk to once again ramp up its full-year guidance.

Commentary

With so many products currently subject to Trump administration tariffs, a huge portion of entries from China will not be eligible for CBP's recently announced COVID-19-related duty deferral program.

More Commentary