Customer Advisory COVID-19

Since the COVID-19 virus has spread, we have extended our COVID-19 customer update. We have compiled and aggregated facts and figures across all business areas as well as covering all regions. Please continue to be engaged with your account managers on your latest plans, prices and projections. We continue to make every effort to support your business.


Global Market Updates

A peak in air capacity market demand of the vaccine distribution is expected to take place in H2 / 2021. We also see a shift in the projections related to exporting regions such as in the Americas where the USA may start exporting earlier than expected and therefore impacting specific trade lanes, such as USA to LATAM. Countries such as India are however expected to refrain from exporting certain medication produced in India as they see a resurgence of the COVID-19 pandemic on their population while remaining with Europe for the time being the biggest exporter of COVID-19 vaccines.

Various pharmaceutical companies have received emergency approval for COVID-19 vaccines. Further vaccines are in the pipeline or emergency approval has been requested already. With this acceleration of vaccines being approved in many countries we do observe an increase of COVID-19 vaccine production as well as required distribution. Countries that are today already involved in the healthcare sector are also highly involved into this increase in demand. This is a combination of either ingredients required to produce the vaccine or the finished vaccine itself.

Vaccine supply to the southern hemisphere is slowly showing some traction with humanitarian programs such as COVAX, GAVI or HOPE, however still at a much slower pace than expected. Even though shipments are limited, logistics challenges are far greater than in more developed countries as destinations are more difficult to reach due to extremely limited cargo capacity.

Based on these recent developments we do not expect major capacity challenges due to COVID-19 vaccine distribution in Q2 / 2021, but an increasing market demand as of the second half of the year. All supply chain partners will be required to closely collaborate to support the distribution and mitigate potential negative impacts or disruptions through the end-to-end transportation.

For successful distribution, storage, repacking, and administration of a COVID-19 vaccine, additional medical supplies are needed – including needles, syringes, alcohol prep pads, surgical masks and face shields, gloves, mixing kits and additional PPE. Being part of our integrated end-to-end healthcare services DB SCHENKERlife+ with licensed and regulated facilities, alongside dedicated and qualified staff, we offer all conceivable warehousing services to handle medical devices and PPE, while supporting respectively institutions and industries globally.

  • Global

(June 8, 2021) - The capacity supply in the airfreight market remains limited and 10% below 2019 based on year-to-year comparison. The ongoing passenger flight cancellations have large changed the operating model of the airfreight market returning to a Hub and spoke network where the International Hubs have become the most essential and critical network point for international air cargo. Due to the pandemic and expectation of a slowly returning passenger market it is not expected that the market is quickly to change where secondary and smaller airports have played a crucial role in the recent past changing the passenger operation model impacting also the airfreight market by now. The air cargo market continues the high dependency related to air cargo and freighter operators as the market is only slowly ramping up some of the international long-haul passenger flights. This segment is still highly restricted and impacted by governmental immigration rules and restrictions limiting the international travel of passengers. This situation is unlikely to change throughout the year. Therefore, the most crucial aspect in the current market remains access to capacity.

However, the airfreight market has almost never been as crucial in the global supply chain from shippers due to continuous delays and disruptions in the ocean freight market. Due to heavy container shortage, an ongoing strong demand situation in ocean freight and delays in the schedules has led many shippers to change the planning of their supply chains largely focusing to increase the airfreight transportation and utilization to overcome late supply or shortage in key markets.

In example Taiwan has seen some of the strongest growth throughout the past 1 1/2 years due to the large impact of the high-tech industry leading to record export volumes from Taiwan into all key economies. Europe and North America continue the recent strong growth trend that was already monitored in the last couple months. This growth is highly depending on the strong recovery and growth of the automotive, industrial and chemical sector that has recorded strongest growth increases year-on-year and as well on a month-on-month comparison leading to the highest volumes recorded at major European airports.

The most fragile element in the market therefore remains and is the ground handling operations and activities that also caused some supply chain delays and disruptions in recent months and weeks. Especially delays from major US gateways have been monitored in recent weeks where the situation has been most critical. However, the European market only recently recovered from a large impact in Q4 / 2021 and needs to be closely monitored as local COVID-19 outbreaks are the key reason that is leading to workforce shortage and therefore operational delays in the air cargo market.

DB Schenker continues to expand the current own controlled network with additional ad-hoc flights supporting the tight capacity situation on key major trades. As the market remains congested especially on major trades, we are creating solutions that deliver additional stable capacity on major trade lanes for our customers in 2021 to support your business. Please reach out to your local DB Schenker teams and account managers to plan your volumes.

Our DB Schenker own controlled network includes flights on following routes:

→ Fueled with SAF: Frankfurt (FRA) – Shanghai (PVG) – Frankfurt (FRA)
→ Chicago (RFD) – Munich (MUC) – Tokyo (NRT) – Seoul (ICN) – Munich (MUC) – Chicago (RFD)
→ Chicago (ORD / RFD) – Seoul (ICN) – Shanghai (PVG) – Chicago (RFD)
→ Munich (MUC) – Chennai (MAA) – Munich (MUC) – Chicago (RFD)
→ Frankfurt (FRA) – Mumbai (BOM) – Frankfurt (FRA) – Atlanta (ATL) – Frankfurt (FRA)
→ Frankfurt (FRA) – Chicago (ORD / RFD) – Frankfurt (FRA)
→ Frankfurt (HHN) – Shanghai (PVG) – Frankfurt (HHN)
→ Luxembourg (LUX) – Indianapolis (IND) – Luxembourg (LUX)
→ Shanghai (PVG) – Singapore (SIN) – Sydney (SYD)
→ Shanghai (PVG) – Luxembourg (LUX) – Shanghai (PVG)
→ Frankfurt (FRA) – Beijing (PEK)
→ Beijing (PEK) – Frankfurt (FRA)
→ Frankfurt (FRA) – Shanghai (PVG)
→ Shanghai (PVG) – Frankfurt (FRA)
→ Shanghai (PVG) – Chicago (ORD)
→ Frankfurt (FRA / HHN) – Zhengzhou (CGO)
→ Zhengzhou (CGO) – Frankfurt (HHN)
→ Zhengzhou (CGO) – Amsterdam (AMS)
→ Hongkong (HKG) – Chicago (ORD)
→ Hongkong (HKG) – Frankfurt (HHN)


Career Capacity Development 1-12/2020

More detailed information on this new flight schedule can be found by clicking here.

  • Europe 

(June 8, 2021) - All offices remain in full operation with access to terminal handling and ground transportation. All our European hubs deliver import and receive export freight with no backlogs recorded towards the weekend. Operationally, our linehauls to and from the hubs are running as scheduled. In some areas, our cross-border trucks might experience some minor delays.

→ Please get in touch with your DB Schenker Account Manager for more information.

  • Asia Pacific 

(Jun 8, 2021) - There is no reported impact on operations due to COVID-19, with status largely remaining unchanged.

The situation in India is trending towards improvement with lowering rates of daily reported infections. Targeted lockdowns and emergency measures continue to be in effect as required. Malaysia is under nationwide lockdown from June 1 till June 14. Taiwan extends COVID-19 restrictions until June 28. Other countries in the region such as Australia, Cambodia, Japan, the Philippines, Singapore, Thailand, Vietnam etc., continue to be closely monitored with calibrated & localized contingency measures being triggered where necessary. Some delays may be expected. Our priority is still focused on the health and safety of our workforce, while mitigating the operational impact where feasible. This underscores the continued risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation.

Our air freight operations remain available to support customer needs. Control measures remain in effect. Delays / backlog may be expected in customs clearance and transportation. Alternatives to move / transport cargo via other gateways / routes are being established and stop-gap measures for labor / driver shortages are being deployed where necessary. Customers may contact the respective DB Schenker representatives for support or solutions if required.

Capacity is expected to remain volatile. We remain vigilant in monitoring the situation to mitigate events with potential impact to operations. Do refer to our Global Flight Network’s additional scheduled charter services for more solutions that can meet your needs.

  • Middle East/Africa 

(June 08, 2021) - Overall, DB Schenker’s air freight operations in the countries remain uninterrupted and we continue to serve our customers. For more detailed market updates related to Middle East and Africa, please click here.

Situation

Country

No operational restrictions for air cargo business         

Angola, Bahrain, Egypt, Kenya, Namibia, Mozambique, Oman, Qatar, South Africa, Saudi Arabia, UAE

  • Americas 

(June 8, 2021) - Continued strain on capacity on most trade lanes with demand continuing to rise and widebody passenger aircraft cargo capacity slow in returning to compensate. USA airport terminals continue to run behind processing and transitioning import cargo affecting their immediate availability on arrival. Strong demand is as well creating challenges on the export side straining resources. The USA TSA will be introducing new screening requirements starting June 30th all cargo moving on cargo aircraft will require security screening similar to what currently done for movements on passenger aircraft. Key DB Schenker facilities have well established TSA screening processes & equipment in place that will provide an important advantage. But the additional TSA requirements whether with the forwarders or the carriers are expected to slow down transition of cargo and require earlier delivery. DB Schenker will continue to closely monitor airport operations to mitigate impacts to our customers; keeping them informed on status of any delays.

With continued volatility in available capacity in the market, and challenges at the airport terminals, DB Schenker’s own controlled flight network both transatlantic and transpacific is providing secure space for our customers. Our airport-based offices are providing the necessary coordination to provide the fastest transition of cargo possible. Our Rockford (RFD) gateway is supporting our flight operations into the mid-west / Chicago area and providing an excellent alternative.

Americas exports by trade-lane:

USA – Europe

→ Market demand continues moderate to strong from the USA. DB Schenker is maintaining its five 747 freighter flights per week as part of its Global Flight Operations Program. The flights are operating from Atlanta and Chicago-Rockford to Frankfurt & Munich, as well as from Indianapolis to Luxembourg. They offer DB Schenker customers a stable & secure access to capacity in what continues to be a volatile market situation.

USA – Asia (excluding China)

→ Capacity remains tight but on most trade lanes with critical situations remaining with destinations in Australia, Singapore and India. DB Schenker has in place large block space agreements to support these destinations from its key USA Gateways, as well as 747 freighter flight operations two times per week from ORD / RFD to Korea (ICN), that continues on to China (PVG). To India as part of its own controlled flight network there are connections options via our European Hubs to BOM and MAA.

USA – Asia (China Specific)

→ Strong demand to Shanghai & Hong Kong. DB Schenker as part of its own controlled flight network maintains 747 freighter flights from ORD / RFD to PVG, two times per week, providing a secure option to that market and surrounding cities.

USA – Latin Am / Latin Am to Europe and APAC

→ Intra-Americas: Capacity is in strong demand with challenges related to freighter carriers’ schedules fluctuating and passenger flights continuing to be well below pre-COVID-19 levels. This situation is affecting all transit between North & South Am., as well as Central America.

→ Latin Am Exports: European destination capacity is tight with market suffering backlogs due to limited freighter capacity; missing passenger aircraft space and continuing strong demand.

USA / Latin Am to Middle East / Africa

→ South Africa with continued strong market demand and shortage of capacity.

  • Global

(June 8, 2021) – The global market supply and demand graph for 2021 shows an increasing imbalance in favor of the demand.

Global Market Demand Graphic

The annualized market demand is expected to be around 8 - 9% while supply remains unchanged at about 3%. Idle capacity is almost nonexistent and only few new buildings will come into the trades during remainder of the year. The Suez blockage has resulted in heavy equipment deficits due to missing vessel arrivals and thus delayed empty equipment positioning. The situation around the COVID-19 cases in Yantian are adding up and tighten the bottleneck. The current back log is around 23,000 TEU, time to clear is estimated with at least 14, likely more days. Schedules in the main trades remain disrupted and reflect a capacity reduction of up to 25 - 30% weekly, through slid sailings, port omissions and other schedule recovery measures. The trades affected most are Asia to Europe and vice versa, but also ex Asia to NORAM and Europe to NORAM. However, the space decline is followed by general market rate increases, peak season adjustments / introductions and similar. All main trades continue to show record rate levels, several trades will climb up further into July. The overall tight situation is expected to last throughout June and certainly quarter 3 / 2021, some trade report already a strong outlook until CNY in 2022.

Market rates are expected to stay high. Carriers focus on FAK segments and neglect special agreements as much as possible.

Global Supply Demand Graphic

Wide Range of Rates Graphic

We strongly recommend most accurate forecasts for optimal allocation and uplift planning as well as preventing infrastructure bottlenecks (related to availability of truck, rail, barge power).

Schedule quality is globally short of 40%, global delay of vessel arrival is still around 6 to 7 days.

With fuel prices on the rise for IFO380 as well as VLSFO, the bunker adjustment factors have come into play from April onwards and causes rates to reflect related increases.

Import free time in all markets is generally cut down to zero since beginning of the year. The current circumstances make it very important for our customers to plan volume forecast (we advise 4 to 8 weeks in advance) and be flexible to re-route cargo (for congested destinations). Please expect the situation on all trades to remain subject to continuous changes.

With an uncertain outlook on vessel utilization and partly huge impacts on port terminals, we need to prepare for changing schedules and transit times, sudden / unexpected delays in uplift, increased bottlenecks of equipment availability, inconsistent departures and sudden surcharges possibly resulting in higher costs for the supply chain.

Our experts in Ocean will support and guide for

→ SchenkerOcean strategic carrier partnerships to ensure access to equipment and space on all trades.
Volume forecast and allocation planning: through access to volumes on all alliances and consultative volume planning (allocation match based on customer forecast) we ensure proper prioritization.
Conversion from SchenkerOcean FCL to LCL to ensure uplift of faster required part loads.
Resilient and sustainable shipping possibilities through mixed SchenkerOcean carrier portfolio.
→ Various cargo storage options (using own or contracted warehouses and store goods accordingly to ease the rush of cargo at the same time).
→ Use of inhouse options for airfreight, rail freight and combined modes of transport options.
→ Alternate FCL shipping options via breakbulk (on multipurpose vessels).

  • Europe

(June 8, 2021) - All European Ocean Freight Branches are fully functioning operationally.

  • Asia Pacific 

(Jun 8, 2021) - Notwithstanding the market situation as highlighted within Global Ocean Freight section, there are no significant COVID-19 impacted operations as status remains unchanged.

The situation in India is trending towards improvement with lowering rates of daily reported infections. Targeted lockdowns and emergency measures continue to be in effect as required. Malaysia is under nationwide lockdown from Jun 1st till Jun 14th. Taiwan extends COVID-19 restrictions until Jun 28th. Other countries in the region such as Australia, Cambodia, Japan, the Philippines, Singapore, Thailand, Vietnam etc., continue to be closely monitored with calibrated & localized contingency measures being triggered where necessary. Some delays may be expected. Our priority is still focused on the health and safety of our workforce, while mitigating the operational impact where feasible. This underscores the continued risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation.

Our Ocean operations continue to be available to support customer needs. Delays could be expected in customs clearance and transportation. Stop-gap measures will be deployed where necessary.

→ Alternatives to move / transport cargo via other gateways / routes are being established. The ripple effect from the ‘Ever Given - Suez Canal’ incident, as well as the Yantian port situation, are expected to have a prolonged impact on schedules and availability in Asia, over and above current challenges in the market. Do reach out to your respective DB Schenker representatives for support or solutions where required.

  • Middle East/Africa 

(June 8, 2021) - DB Schenker is fully operational and available to manage the current demand from customers even though an equipment shortage has been seen in the region. For more detailed market updates related to Middle East and Africa, please click here.

  • Americas 

(May 25, 2021) - A lot of pressure especially ex South America for all outbound trades: Tight equipment, in particular on the East Coast of South America, overly full ships, therefore services are closed for new bookings in the month of May. Pressure on allocation and equipment availability will continue. Increased market demand for main commodities will continue, depending on the rate exchange which so far is looming a positive trend for exports in coming months. Spot market rate levels expected to continue to increase in the month of June.

  • Global

(May 25, 2021) - Europe Land is fully operational and available for business, managing existing COVID-19 constraints in European countries. Asia gives a heterogeneous picture with most countries fully operational and available for business while a few countries (such as India) are facing challenges, however operating. Asia Landbridge (China to South-East Asia) as well as Eurasia Landbridge (China – Europe Train) are fully operating, although facing congestions. Land operations in the Americas are also showing constraints, but still working close to normal.

  • Europe 

(June 8, 2021) - General restrictions to contain the COVID-19 pandemic are continuing to be in place in several European countries and are in parts directly or indirectly affecting the transportation of goods. Nevertheless, we see a trend towards more and more relieving of restrictions throughout Europe. DB Schenker Land Transport monitors the situation closely and reacts specially to border situations due to regulations imposed by individual countries. For any potential cases of disruptive conditions, we follow our pre-defined contingency plans to ensure flows of cargo as much as possible. In addition, we are adapting our transport service offerings daily to the needs of our customers. Europe Land Transport Heatmap Graphic

Are you up-scaling or down-scaling your business activity in response to the changing market environment? DB Schenker Landtransport is your partner with one of the strongest and most resilient networks across 40 countries in Europe. Moreover, with our digital channels like connect4Land we offer a 24/7 entry point to our transport services, easy to use from everywhere, every time – Click. Ship. Done.

  • Asia Pacific 

(June 8, 2021) - Our Domestic Land product continues unabated to provide our regular high level of service. The outbreak in India continues to create delays due to a dwindling workforce and high transit restrictions between states and territories. The situation in Malaysia, Thailand and other APAC countries are being monitored closely. as the local situations could lead to delays.

Our Asia Landbridge FTL / LTL road service is running to schedule.

However, border congestion due to high market demand may add between 1 and 3 days to Asia Landbridge. A global demand for containers due to Ocean and Air capacity constraints continues to put significant pressure on road assets across the region. We are also still seeing the after-effects of the Suez Canal blockage and expect this to continue until the end of July. DB Schenker staff at Asia Landbridge border offices continue to ensure lead-times are minimized and service levels maintained through “triage” prioritization. Additional labor and associated domicile costs are still required to strategically avoid lengthy quarantine periods for our international drivers. A recent announcement from Savannakhét Provincial Governor mandates testing of Drivers crossing this area (at the Thai-Lao border). Therefore, additional costs are likely to be imposed on shipments traversing Savannakhét for the foreseeable future.

Our Domestic and International Land services continue to meet the high market demand and are strategically positioned to meet the forecast demand spike associated with ongoing reduced Ocean freight and Airfreight capacity. However, Customers are strongly urged to coordinate any volume spikes with their DB Schenker Account Manager as early as possible.

Congestion levels continue to fluctuate on our Eurasia service for Rail and Road. Please refer to table 1. Low < 3 days, Medium > 3 days, High > 5 days, Extreme > 7 days

Forecast transit time (CY-CY) westbound is 25 to 30 days and eastbound 22 to 33 days.

Table showing the Westbound ETD delay and border congestion delay risks

Westbound container stocks remain low and are contributing to delays.

Xi’an’s EB booking for sanitary goods & Shanxi Province deliveries may incur additional 3-7 days due to inspection.

Brest/Mala border heavily congested due to recent smuggling attempt leading to an estimated 7-day delay.

Additional costs relating to disinfecting cargo will be imposed upon the relevant freight payer or consignee for all eastbound shipments.

We therefore recommend checking estimated lead-times with your DB Schenker Account Manager.

  • Middle East/Africa 

(June 8, 2021) - Land transportation may be delayed in some countries due to additional checking. In some parts of the GCC, cargo movement has been restricted to food and essential items.

→ Please get in touch with your DB Schenker Account Manager for more details.

  • Americas

(June 8, 2021) -

→ USA: Fully operational.
→ Brazil: Market is running in normal conditions. Border between Brazil, Chile, Argentina and Paraguay working partially with many restrictions.
→ Mexico: 100% fully operational.
→ Canada: DB Schenker is fully operational.

  • Global

(June 8, 2021) – While noticing different governmental restrictions especially in the APAC region, our operations and customer services remain stable worldwide. While continuously and closely monitoring the situation in all regions, we persist in e.g. social distancing, wearing masks, temperature control, sanitizing stations and respective controlling of health and safety regulations.

With our global healthcare quality framework, including regional and local competence centers, we support companies and institutions around the globe with handling of PPE and medical devices, successful distribution, and administration of COVID-19 vaccines.

For short term support we keep up our customer service offering:

→ In case you need temporary space, reach out to your DB Schenker Account Manager or local contact person!

  • Europe 

(June 8, 2021) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.

  • Asia Pacific 

(June 8, 2021) - There is no significant change in status for APAC countries generally from previous updates. The situation in India is trending towards improvement with lowering rates of daily reported infections. Targeted lockdowns and emergency measures continue to be in effect as required. Malaysia is under nationwide lockdown from Jun 1st till Jun 14th. Taiwan extends COVID-19 restrictions until Jun 28th. Other countries in the region such as Australia, Cambodia, Japan, the Philippines, Singapore, Thailand, Vietnam etc., continue to be closely monitored with calibrated & localized contingency measures being triggered where necessary. Some delays may be expected. Our priority is still focused on the health and safety of our workforce, while mitigating the operational impact where feasible. This underscores the continued risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation.

We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.

→ For India, please refer to our India website for detailed information via download.

While governmental imposed restrictions in APAC countries continue at varying levels, our service levels so far are maintained with our CL operations available to support customer needs.

Delays may be expected due to availability of workforce and enhanced strictly enforced hygiene and monitoring SOPs. Customers may contact the respective DB Schenker representatives for further support if necessary.

  • Middle East/Africa 

(June 8, 2021) - All DB Schenker contract logistics facilities in MEA are operational as per the appropriate health and safety standards and other regulations levied by the local government.

  • Americas

(June 8, 2021) - Our warehouses continue to operate with precautionary measures in place for the health of our people and hence keeping up our customer services.

→ USA: All operations in the USA remain operational with precautionary measures in place for the health of our people and delivery of services to our clients. There is now country wide vaccine availability to help stop the spread in the USA.
→ Mexico: COVID-19 numbers are still prevalent in Mexico. We are doing everything possible to minimize the impact to our personnel and facilities.
→ Canada: All Contract Logistics sites in Canada remain operational with health and safety measures in place for the safety of our associates and continued service.

DB Schenker Organizational Update

DB Schenker is closely monitoring the COVID-19 situation. With precautionary measures in place, we are aiming to maintain full operability across all DB Schenker operations. In our offices across all continents, we have taken action to enable as many employees as possible to work from home to support the social distancing guidelines put in place by public authorities.

The next customer advisory will be the June 23 release or earlier should there be significant developments. Visit our website in advance to be among the first informed.

Thank you for your patience and support.
DB Schenker COVID-19 Customer Advisory Team

COVID-19 Customer Advisory Global Update – May 26, 2021

COVID-19 Customer Advisory Global Update – May 11, 2021

We have used our utmost care in providing the information above. While the information above has been provided to the best of our knowledge and ability, the DB Schenker Group does not assume any liabilities arising from this information of the use thereof.