On 12th March 2020, the World Health Organization (WHO) categorised the coronavirus outbreak that originated in Wuhan, China as a pandemic. This was followed with a call for all countries to take “urgent and aggressive action” to change the course of the pandemic.
Almost two months on, the fortunes of nations around the globe vary greatly. Australia and New Zealand have managed to avoid the disastrous consequences witnessed in much of Europe and the United States of America. As both Australia and New Zealand start to wind back the restrictions placed on the movement of their residents, there is currently no end in sight for many elsewhere.
Following is a snapshot of the current affairs both locally and internationally.
Australia’s reported cases sits at 6,875 as at 6th May with 97 reported fatalities from the virus. This equates to 230 new cases in the last two weeks, a very positive sign for the Government and entire population. State borders remain closed, along with schools and non-essential services, although the Government is keen to see a return to business as soon as possible. How this will be managed is being left to the states to coordinate, however it is expected that many employers and employees will handle the return very slowly, with some expecting a “new normal” in the way that business is run.
Local law enforcement in the various states is issuing large fines for those ignoring the current lockdown rules, with one instance of jail-time for a repeat offender in Western Australia.
The delivery of all Australian Government services has been classified as essential services by the Federal Government. All biosecurity and imported food inspection operations will continue to be delivered, including treatments offered by third parties that are, by extension, considered essential services. The Department of Agriculture, Water and the Environment is currently working on business continuity plans for their various operations in a bid to minimise impacts and reallocate resources where volumes have increased or decreased as a direct result of the pandemic. Further information will follow as it becomes available.
On 30th March 2020, the Customs (Prohibited Exports) Regulations 1958 were temporarily amended to prohibit the non-commercial export of certain medical goods from Australia. These items include disposable face masks, gloves and gowns as well as protective eyewear and alcohol wipes and hand sanitiser.
Australian importing associations have been in discussions with ATO and Treasury in an attempt to have the Government allow deferral of duty and GST for all importers. The logic was that many importers will be feeling the pinch due to lack of sales which will result in cashflow issues. With the Government’s commitment to trying to ensure businesses retain their staff this seems a logical step, and one taken by several other countries globally. At this stage it does seem unlikely that the Government will make this concession for duties, however the ATO does already operate a deferred GST scheme which is available to all importers that meet with the set requirements, namely monthly online lodgement of their Business Activity Statement and no outstanding debts. ATO is currently fast-tracking these applications so any importers feeling uneasy regarding their cashflow may wish to investigate this scheme.
The Australian Government announced on 30th April 2020, the implementation of a new temporary Bylaw to allow the importation of certain goods for use in the diagnosis, treatment or prevention of spread of coronavirus. The Bylaw is in force from 1st February 2020 until 31 July 2020, with refund provisions available, and allows items such as face masks; gloves; gowns and clothes; goggles, glasses, eye visors and face shields; disinfectants (excluding hand sanitisers); soaps; Covid 19 test kits and reagents; and viral transport media, to be imported free from duty.
Some states have started to relax restrictions due the reduction in reported new cases. This could see a slow return to normality for businesses to resume and people to return to work, thereby stimulating the economy.
The reduction of import volumes is expected to continue for another two to three months at least, as production and export of goods from major trading partners in Europe and North America continues to stagnate.
The Australian Government has released its COVIDSafe App, which tracks movement of persons and allows traceability of those movements in the event somebody later contracts the virus. Residents are urged to download the app as a large uptake should result in the lifting of some restrictions across the country.
The number of cases outside of China continues to rise rapidly, with the United States hardest hit. Spain, Italy, France, Germany, United Kingdom, Brazil, Turkey, Russia and Iran have all also surpassed China in terms of number of reported cases. 212 countries and territories have confirmed cases of coronavirus, with over 3,740,000 diagnoses and 258,850 deaths recorded as at 6th May 2020.
Following is information collated for various countries, however importers and exporters are advised to check with your clients, suppliers and freight forwarders for further country specific information.
Governments around the world had all imposed similar restrictions to those witnessed in Australia. Some countries went further and implemented full lockdown restrictions. These respective Governments are introducing large financial packages designed to minimise disruptions and job loss while assisting those that are stood down with rapid access to benefits.
Spain is on lockdown until at least 9th May, although some construction and factory workers have been allowed to return to work.
Italy relaxed lockdown restrictions this week with millions returning to work after weeks of lockdown, with restaurants able to prepare takeaway food, parks reopened (with required social distancing maintained) and residents able to move more than 200 yards from their homes. The Government has recommended residents remain vigilant and continue to exercise many of the measures that have kept them safe so far.
France has eased some lockdown restrictions but has extended the health emergency until late July. All non-essential public spaces are closed until at least 11th May.
Italy and France have both entered into recession, with France suffering its sharpest contraction since records began in 1949, a slump not seen since WWII. The Italian economic forecast predicts a staggering 15% contraction in the first half of 2020.
The United Kingdom has now surpassed the death toll of Spain and Italy, with the figure standing at 29,427 as at 6th May. Lockdown restrictions started on 23rd March and are due to be reviewed on 7th May and a plan unveiled for the country’s road to recovery.
Germany has started to ease restrictions, with many shops and public spaces starting to reopen to the public. This has seen an increase in infection rates with Germany’s lockdown being a shining example throughout Europe.
The EC has unveiled a new guide for member states to implement “green lanes” for freight at EU borders. This is an effort to avert lengthy queues and allow critical goods to move more freely, particularly from eastern Europe. Queues on the Polish / German border were at points stretching to 50 kilometres. The new measures are hoped to reduce border processing times to fifteen minutes.
Reports from the United States estimate some 30 million jobs have been lost resulting from the outbreak.
India has extended its lockdown until at least 17th May. Some workers in the agricultural, manufacturing and construction industries have returned to work.
New Zealand is winding back to “Level 3” restrictions from 27th April resulting from the success of the Level 4 lockdown on Covid-19 spread. Residents are still required to stay home unless they need to perform supermarket / pharmaceutical shopping; work for an essential service; or to perform outdoor activities like gardening or walking in their local area. This will be reviewed again next week.
Dubai began to ease restrictions from 24th April. Prior to this, permits were required for every trip outside of a residence.
Colombia has extended its initial quarantine period to now end on 11th May 2020.
South Africa began relaxing restrictions from 1st May. Residents may leave home between 6am-9am for exercise, with an incremental plan for return to work and public transport running at a reduced capacity.
A global shortage of Personal Protective Equipment (PPE) is being exacerbated by Governments impounding exports of goods for their own needs. The United States has been accused by the German Government of “modern piracy” as many legitimate shipments of PPE are not reaching their intended destination. As Governments and states compete for PPE, so too are many retailers and warehouse operators, as they look to provide equipment for their staff. Add to this the fact that many Governments are seizing sub-standard medical supplies before they make it to market and it appears that the shortage will not be filled anytime soon.
Freight Forwarders globally are being asked to be vigilant as criminals attempt to exploit the Covid-19 situation by pushing fake medicines and PPE into supply chains. These items pose a significant risk to individuals as they offer little to no protection against the virus and are likely to cost lives. In Australia, businesses can provide anonymous tips to the Australian Border Force through their Border Watch program.
China continues to test non-symptom patients in an effort to control community transmission that led to a brief second wave of cases. The Government has confirmed that there are no patients remaining in ICU in Wuhan as at 27th April 2020. The situation in Heilongjiang province in north-eastern China is reportedly now also under control.
Most new cases being diagnosed in China are ‘imported’ cases and there has been a small spike in the past two weeks. Most large cities have kept entertainment facilities closed in a bid to avoid a second wave of diagnoses.
China Customs Notice No.53 of 10th April 2020 has confirmed that eleven medical related items will now be inspected to ensure the quality of exported goods. This appears to be in response to claims globally of inferior product being exported as brand name goods. These shipments can expect delays. The goods in question are PPE, thermometers, ventilators, hair nets, protective glasses and goggles, medical gloves, shoe covers, patient monitoring devices, medical wadding and gauze and disinfectants.
As lockdowns begin to lift there will be a clamour for collection of export cargoes. Our partners overseas will be co-ordinating with suppliers to schedule collection and routing to move the goods as required. Delays should be expected at this time.
The rapid spread of the virus to new locations has seen a reduction in flying demand. Qantas has confirmed that they are attempting to maintain their usual connectivity however will do so with smaller aircraft. This will extend until mid-September 2020 and will see a smaller freight capacity on many routes. The Brisbane to Chicago route that was due to open on 20th April has now been delayed until September. Strengthened demand for the direct Perth-London route will see a temporary re-routing to Sydney-Perth-London with effect from 20th April.
Virgin Australia has entered into voluntary receivership. At this stage hope remains that a buyer can be found to keep the competition with Qantas on Australian domestic lanes. This receivership has also reduced airfreight capacity between Australian cities.
IATA has published an initial assessment regarding the impact of coronavirus, with an anticipated 13% full-year loss of passenger demand for carriers in Asia-Pacific. Offset against the previously expected growth, this would result in an approximate 8% reduction against 2019 levels. To put that into monetary terms, this translates to roughly a USD 28 billion revenue loss. It remains to be seen whether carriers will increase cargo rates with the anticipated increased demand in an effort to offset some of these losses.
The grounding of a significant part of the World’s passenger fleet has seen a huge loss of cargo capacity globally which has in turn driven up the cost of air freight. Some airlines are adapting passenger aircraft to add the cargo capacity but the high demand for movement of medical supplies and perishables leaves little space for other goods. TAC Index indicates that air freight rates from Shanghai to European destinations have more than doubled in the past week.
If you have any urgent cargo to move from China via air cargo please discuss this with your Account Manager.
As lockdowns begin to lift there will be a clamour for collection of export cargoes and empty equipment. Our partners overseas will be co-ordinating with suppliers and shipping lines to schedule collection and routing to move the goods as required. Delays should be anticipated at this time.
Vessels sailing from China to Australia after 1st February 2020 will not be allowed to enter port within a 14-day window of last being in China. This means for voyages taking 12 days, the vessel will have to anchor offshore for 2 days before being permitted to berth. Pilots are permitted to join vessels before the 14 days have elapsed but are advised to wear personal protective equipment (gloves and mask. If any single member of crew joins the vessel in China, the entire crew must serve the 14-day quarantine period.
On 19th March Maritime Safety Queensland (MSQ) announced a ban all commercial shipping into their ports. While this measure was undoubtedly taken to protect the interests of the Queensland population and businesses, it gave little thought to the fact that urgent supplies, including medical supplies and food products, would be caught up as a result of the ban. On 21st March MSQ changed position in light of these facts and the strain that would be added to the domestic freight network when relocating goods to Queensland. The Port of Brisbane will continue to receive international vessels, inline with the 14 day isolation period announced by the Federal Government, however all other ports in Queensland will remain under the guidance of Wednesday’s decision and foreign vessels will not be allowed to berth.
Due to the unpredictability of the virus and the fluidity of each Government’s response, the Australia Peak Shippers Association (APSA) has agreed to waive the need for 30 days notice to be provided to shippers informing them of blank sailings. Dozens of blank sailings has occurred globally while further blank sailings remain a possibility and will be updated here as news is made available.
Maersk Line has confirmed a further blank sailing on their Komodo Service. Al Hilal v.018S into Australia will now depart a week later, effectively cancelling the week 19 service. This service will depart Singapore on 12th May 2020.
A lack of container movements has resulted in surpluses and shortages of equipment globally. Full and empty containers are currently congesting ports globally, and the lack of exports from China following the outbreak resulted in a shortage of empty equipment for exports from other countries. Both the United States of America and Europe are likely to be heavily impacted in the coming months. To increase the likelihood of equipment being available, Henning Harders as well as our overseas partners will require early bookings for cargo movements from these origins.
MSC deployed its mega-vessels to try and solve the container imbalance crisis by moving empty containers from China to the USA and Europe in late March and early April. Two vessels, the MSC Mia and the MSC Nela, both with a capacity in excess of 23,000 TEU (10,000 TEU more than the ships currently sailing the route) loaded empty containers in addition to the booked cargo, to deliver much needed empty equipment into North Europe and the United States West Coast.
Maersk Line has announced a change in port rotation for vessels calling into Australia on its Dragon service in order to improve schedule reliability. This measure is taken in view of the 14-day period vessels are required wait prior to berthing in Australia. Effective from vessel Brevik Bridge v.011S, ETD Yokohama 10th March, the Brisbane southbound call will be omitted, adding 12 days for any freight destined for Brisbane. The revised rotation is Yokohama – Osaka – Busan – Qingdao – Shanghai – Ningbo – Sydney – Melbourne – Brisbane – Yokohama.
The record low oil prices along with the decrease in volume on the Asia-Europe routes has seen some carriers change the routing and avoid the Suez Canal to increase profits. The re-routing around the Cape of Good Hope will see transit times increase for this trade lane.
Reports have confirmed that there were 212 blank sailings up to 6th April this year, with some experts tipping losses to the shipping industry of approximately USD 23 billion. The expectation is that there will be more blank sailings as demand from Europe and the United States decreases which could place some carriers under extreme stress, last witnessed in 2016 when Hanjin Shipping was declared bankrupt.
CMA CGM has lifted its reefer congestion surcharge to the ports of Shanghai and Ningbo as the ports have resumed normal operations. Consequently, all reefers diverted to other ports are in the process of being loaded back to their intended destinations.
Maersk Line has confirmed a further blank sailing on their Komodo Service. Al Hilal v.020N will depart Brisbane on 24th May, a week later than originally scheduled, effectively cancelling the week 20 service.
The change in supply and demand of shipping services has seen some shipping lines implement a Peak Season Surcharge for cargo moving from Australia to most regions (except USA and Europe).
The Australian Government announced on 30th March that the Customs (Prohibited Exports) Regulations 1958 were temporarily amended to prohibit the non-commercial export of personal protective equipment and hand sanitiser. These items are in short-supply in Australia and required for the health and safety of Australian medical personnel and residents, so the export of such items is not in the national interest. Authorities will be given greater powers to seize items at the border with increased penalties applicable to individuals and groups profiteering from the COVID-19 outbreak.
Concerns remain relating to delays in clearance at ports and airports due to lack of commercial and regulatory paperwork from suppliers and Government departments alike.
Industry associations raised concerns with Department of Agriculture (DoA) regarding possible delays for consignments that cannot be released from Biosecurity control due to minor documentary amendments being required and not able to be obtained from the Chinese Authorities. Advice received from DoA is that as the issues and delays are only anticipated at this stage, the Department will not be revising any of its documentary policies to accommodate. If consignments are received that will be held pending documentation, movement of goods to an appropriate class of Approved Arrangement site should be requested.
ABF has made some allowances regarding unsigned MAFTA CoOs. Some certificates are being issued without a stamp and signature, which will be accepted on the condition that we are able to provide ABF with a dump of the MITI system screen showing that the certificate was approved by MITI. The dating of the CoO must also be within the period of the Malaysian Government Movement Control Order (18th March – 14th April). This only covers MAFTA certificates and not AANZFTA certificates.
If you have any shipments en-route to Australia and are missing documentation, please contact your Key Account Manager to discuss options.
Effective from 25th March Australian permanent residents are restricted from travelling overseas unless they meet certain exemptions. Travellers meeting the exemptions can apply online to the commissioner of the ABF for permission. Further information can be found here.
The Australian Government has imposed travel restrictions on all passengers arriving from overseas. Effective from 16th March, all passengers travelling or returning to Australia will be required to self-isolate for 14 days, including Australian citizens.
There is currently a level four “do not travel” advice warning in place recommending Australians do not travel to China. Australia is now also urging that travellers “exercise a high degree of caution” when travelling to Italy in the wake of the rapid expansion of the virus through the north of the country.
New questions have been added to the Traveller with Illness Checklist (TIC) for biosecurity officers to administer and attempt to identify passengers arriving that have been exposed to Coronavirus.
Travellers are also urged to reconsider taking an overseas cruise at this time, particularly passengers with any underlying health conditions. Some countries are not allowing passengers to disembark while others are denying entry to cruise liners altogether.
On 17th March the Australian Government has published advice for all Australian’s to reconsider their need for overseas travel at this time. If residents and citizens are currently overseas and wish to return, they should do so as soon as possible by commercial means. These returning travellers will then be required to self-isolate for 14 days.
A fact sheet has been issued by Department of Health for border workers with concerns about handling and destuffing imported goods from Hubei province. The fact sheet confirms items such as symptoms of the virus and how to minimise risk of exposure or contracting the virus. This fact sheet has important information for the wider community as well and is worthwhile reading.
Further information can also be found at the Department of Health’s website www.health.gov.au.
Henning Harders has successfully implemented its “Work from Home” contingency arrangements. Supported by our advanced operating system development, this was managed in stages to ensure a seamless transition with no business interruption.
By carefully managing the relocation of resources in stages throughout the last week, we are now positioned to ensure both the safety and wellbeing of our staff as well as the continued operations and service our business partners and clients have grown accustomed to.
Our employee email signatures have been updated with direct line details to allow for ease of contact.
As the news of the outbreak is ever-changing, Australia’s response remains fluid. Henning Harders will continue to update stakeholders as news develops.
Please contact your Key Account Manager or Harders Advisory for further information.