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DB Schenker Air Freight Intermodal Solutions Airplane Inside Loading

Customer Advisory COVID-19 Global Update

May 19, 2020

Please find here the most recent edition of the COVID-19 global customer advisory update. Every Tuesday this update will give you up-to-date guidance and orientation over all business areas and all geographies.

In the 24/7 newsfeed on our website you will find additional links and downloads supporting the topics of this document. Please visit: 24/7 News Update

Your account team is continuously updated on the evolving situation and our corresponding solutions. Please continue to be engaged with your Account Managers on your latest plans, prices and projections. They will invest the utmost effort to support your business.

Global Market Updates

  • Global

(May 19, 2020) - As capacity remains short in the global airfreight market, the demand ex China remains on a very high level for the third consecutive month in a row. This has also led to a situation where DB Schenker has now setup a third flight in cooperation with Icelandair for urgent required medical equipment (PPE) from China to Europe. This flight will depart from Nanjing to Munich and support the critical supply of PPE material for European destinations. The new operation from Nanjing airport will allow for an improved handling process due to airport warehouse congestions at Shanghai airport terminals throughout the last couple weeks.

In addition to this new solution, we are now also connecting Europe twice a week with Australia through our new flight operations via Chicago. We are ready to transport your goods from Frankfurt to Sydney within 5 days!

Please reach out to your Account Manager or local DB Schenker team. We are ready to support you with our solutions during this critical time!

At DB Schenker, we have set up a dedicated solution for our customers in cooperation with our partner Icelandair for at least 45 scheduled flights until the end of May between Shanghai, China to Munich, Germany and Chicago, USA. The B767 was converted on the upper deck to fit as much cargo as possible taking out all the seats to cover the critical demand of medical supply. In case you need support on transport solutions for PPE material, please reach out to your Account Manager or local DB Schenker team. We are ready to support you through our dedicated teams and airfreight solutions!

In addition, our console charter flight schedule remains in place to support your demand and critical shipments ensuring we provide you with alternative solutions:

Our console charter flight schedule now includes the following flight operations:

➢ Europe – China – Europe: 3 flights per week (B747-400F)
➢ Hongkong – Europe: 2 flights per week (B747-400F)
➢ China – USA: 3 flights per week (B747-400F)
➢ Europe – USA – Europe: 3 flights per week (MD11F and B747-400F)
➢ USA – Australia: 1 flight per week (B777F)
➢ Europe – India – Europe: 1 flight per week (B747-400F)

  • Europe 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

(May 13, 2020) - 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 remain on time. In some areas, our cross-border trucks might experience some minor delays.

Airfreight export market volumes are slightly lower due to Easter, but import is still very stable on a high level. China imports go very strong at continuously all-time highs due to an ongoing strong demand in medical supplies, protective gears, and face masks which DB Schenker continues to support with utmost priority.

  • Asia Pacific 

(May 19, 2020) - There are no significant updates in operational status from the previous advisory.

Congestion in Greater China remains, albeit improving gradually. Vietnam airlines starting to fly internationally from June 1. Some national carriers in South East Asia are facing financial difficulties, with possible bail out by the respective government. Capacity is expected to remain volatile.

(May 13, 2020) - More countries are easing up their restrictions allowing for restarting certain industries which will increase export demand for these countries.

➢ On India charters, plans are in place and timed for when the market opens. Schenker is now also able to support cross border trucking within India.
➢ Demand for ex China is continuing due to PPE and other general cargo. Backlog at all China airports, requiring at least 48 hours advance notice for tendering in of cargo.
➢ The transpacific trade from China is currently the most constrained trade lane. This is due to a high PPE demand from China to US. Additional passenger flights are supplying the urgently required capacity for medical equipment. Any availability for additional flights or capacity is highly limited within the next couple weeks.

We have put additional charter programs (such as for Intra-Asia SG to IN and others) planned for May 2020 in place. Do get in touch with your Account Managers for further details.

US carriers have also been informed to prioritize cargo for the purpose of transportation of medical supplies in / out of the US. Medical devices, including masks, cannot be exported from the US.

  • Middle East/Africa 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

(May 13, 2020) - Belly capacity constraints remain as passenger services continue to be suspended in many other MEA countries. DB Schenker in the region can manage the current demand with available cargo capacity. Please note that airlines have withdrawn the contract rates until the situation resumes back to normal.

Overall, our airfreight operations in the countries remain uninterrupted as we continue to serve customers. In many countries, logistics and supply chains are considered business critical. Therefore, our services do not cease during lockdowns.

Situation

Country

No operational restrictions for air cargo business

Qatar, Kenya, Oman, South Africa, Bahrain, Saudi Arabia, UAE , Egypt

Restrictions for operational air cargo business

  • Americas 

(May 19, 2020) - USA – China

➢ With the large number of inbound freighter flights, scheduled and charters, USA exports have sufficient capacity to meet demands.
➢ Rates remain above pre-COVID-19 levels however but no exceptional highs. No backlogs from the USA to China.

USA – Asia (excluding China)

➢ Australia, India, Japan, Korea, Singapore and Thailand, Singapore with tight capacity with some backlogs. Market pricing high.

USA – Europe

➢ Demand is moderate with sufficient capacity to avoid backlogs. Pricing still above pre-COVID-19 levels.
➢ We are making full use of our own freighter flight operations: 3 x week ex ORD and ATL to FRA.

USA – Latin Am / Latin Am to Europe and APAC

➢ Demand for available freighter capacity remains strong with space tight to some destinations. Pricing trending higher.
➢ Transit delays possible at airport / carrier terminal operations.

  • Global

(May 19, 2020) - There are no significant updates in status from the previous advisory.

During April, 93 out 575 scheduled departures have been blanked. This equals 16%. From 457 sailings for May about 18% have been announced as void sailings. This month, the Transpacific Asia to NORAM is the most affected trade with 45 blank sailings, i.e. 55%, followed by Asia to Europe with 34% and Europe to NORAM with 11%. The main routes from Asia to Europe and Asia to North America have been seeing a total cancellation of 3.4 Mio TEU of carrying capacity due to COVID-19 since the outbreak in China until end of Q2/2020.

This number increases to 4.6 Mio TEU if blank sailings related to Chinese New Year are counted into this scenario as well.

It becomes clear that the effects of ramping up and ramping down will keep the supply chain busy for a couple of weeks before and after the capacity measures. In consequence, access to capacity varies from week to week and is different trade by trade. This also impacts lead times which are continuously changing.

Overall, we see a decline of 7 million TEU in 2020. Record low oil prices and increased fears about port congestion when post-pandemic China volume arrives in the EU over the next few weeks.

Inventory in the warehouses at destination is still high. We expect that receivers might not pick up boxes from the ports which would lead to congestion. We can support to avoid or to clear bottlenecks with pre-pull activities and arranging space in our facilities.

With all stakeholders in the supply chain, the unpredictability and constant changes of the last weeks have underlined the need to stay flexible and to be able to adapt any time. It is not a surprise that carriers announce that their booking acceptance will not go beyond 6 weeks due to possible future changes.

Please expect the situation on all trades subject to continuous changes.

With massive vessel withdrawal programs, the uncertain outlook on vessel utilizations, and partly huge impacts on port terminals due to congestion, we need to prepare for potentially longer transit times (due to slow steaming, port omissions or additional port inclusions as a result of service mergers), sudden / unexpected delays in uplift, increased bottlenecks of equipment availability (in particular in inland locations and for special equipment types), less frequent departures, and higher costs.

Our experts in Ocean will support and guide for:

➢ SchenkerOcean priority product on all main trades which guarantees loading within a fixed window.
➢ various SchenkerOcean delay in transit options (a. stopping of cargo in a t / s port, b. using own or contracted warehouses and store goods accordingly), this reduces actual cost in the ports (costly storage) and helps ports to prevent from being congested and thus ensures moves at quay without waiting time for truckers.
➢ SchenkerOcean offer for “slow boat – fast boat” possibilities if delay in transit is not an option (e.g. with sailings around Cape of Good Hope)
➢ SchenkerOcean offers for alternate routing possibilities to ensure cargo is lifted from port of loading.
➢ Volume forecast and allocation planning: We have access to volumes on all alliances and support volumes planning through consultation services(allocation match based on customer forecast). Under progress: volume prediction per vertical.

New: Personal Protective Equipment services ex China Europe

  • Europe 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

On exports ex Europe to the East, carriers still report strong booking situations with only limited shortfalls. This situation will probably continue until end-May. It is expected that the current PSS introduced by many carriers during Q1 will remain in place throughout May. Especially commodity volumes are still going strong (logs, chemicals). Equipment availability becomes a larger concern due to an upcoming 25-40% reduction of inbound flows plus expected longer usage of the equipment.

On trades to the West, the utilization is overall rather weak (to NORAM as well as to LATAM); it is not a surprise that carriers take action: a massive drop in tonnage this week, i.e. close to 40% less availability; week 20 shows a reduction by 14%, then another massive reduction in week 24 with 22% capacity reduction. Week on week changes will be positive for most of the weeks (the month of May is up by 5%, June forecasts indicate a 3% increase) whereas the trade is showing fewer positive signals.

All European Ocean Freight Branches are fully functioning operationally.

  • Asia Pacific 

(May 19, 2020) - There are no significant updates on the operational status from the previous advisory.

Ex China, Ocean Freight is stabilizing, and blank sailings are reduced but still impacting all trades significantly. Whilst demand to Middle East extremely weak some slow uptrends can be monitored on trades to ISC and Oceania. An increase in demand for the express ocean services on the trans-pacific can be monitored.

(May 13, 2020) - On the TP to NORAM: high vessel utilization with 95-98% for both US West Coast and East Coast, tight space and roll-over scenario for the next 2 weeks on specific loops, capacity drops up to 40%. Several carriers have announced GRI’s for May, however we do not expect this to materialize. The May outlook continues to be bleak in terms of rates and volume. We expect more blank sailings to be announced for May to cope with the low demand and to maintain rates at current level. High utilization with roll-over on certain “popular” loops to continue in May. Asia to LATAM continues with capacity drops of up to 40% to improve utilizations and, in consequence, stabilize rates. Finally, APAC to MEA finds carriers try to keep vessel utilization high by reducing rates towards the end of April as well as through implementing a blank sailing program, i.e. to ME about 37% and to Africa about 33%.

The strong trend into Oceania continues: Ships leave North Asia at 120% and 80% ex SEA – meaning space remains tight due to service downsizing to and from the Indian Subcontinent, space remains especially tight and consists of rolling in t / s ports for the next 2-4 weeks; huge arrival delays in India is ongoing. Vessels still running around 90% utilization for imports, 95% for exports. Ongoing issues with equipment availability reported by both origin and carriers. Challenge of reefer plugs availability persists as importers are not picking up cargo. Carriers have reacted immediately to this by introducing congestion surcharges. Carriers continue to reserve the right to discharge boxes in nearby trans-shipment ports until a smooth transportation and storage can be granted.

For all APAC countries, customers are encouraged to use seaway bills to avoid reliance on original bill of lading as courier companies may not deliver timely in the coming weeks and most companies, including DB Schenker, are operating with working from home based on health concerns and strict government regulations.

  • Middle East/Africa 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

(May 13, 2020) - Over 90% vessel utilization ex MEA. The share of blank sailings has reduced to a little over 20% both to the Middle East and Africa.

Our Ocean Freight offices in the countries continue to serve customers as logistics and supply chains are considered business critical as per local government directives. Moreover, we are closely monitoring the situation as the Ramadan season begins.

(May 13, 2020) - As an alternative for airfreight and land transportation in GCC, DB Schenker is offering weekly less-than-container load (LCL) consoles from the port of Jebel Ali (AE JEA) to Abu Dhabi, Bahrain, Kuwait, Oman, Pakistan, Qatar, and Saudi Arabia.

  • Americas 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

(May 13, 2020) - Ocean carriers are continuously largely implementing blank sailings. Current announced blank sailings will last to the month of June. Currently observing some equipment shortage at US origins.

(Apr 23, 2020) - Continued pressure in CL / AR / BR regarding a deficit of reefers and food grade containers; 100% vessel utilization due to dry fruit cargo rush until early May, however WCSA is slowing down while ECSA remains strong. We expect serious equipment shortages during mid-May as a result of the import blank sailings. Free-time extensions will be limited, trucking productivity could be affected by curfews. No restrictions observed to vessel operations across the region.

Carriers have started to omit COVID-19 shaken port city Guayaquil / Ecuador and calls Posorja instead.

  • Global

(May 19, 2020) - There are no significant updates in status from the previous advisory.

Europe Land is fully operational and available for business, managing constraints and challenges in several countries. Asia is a heterogeneous picture with China fully operational and available for business while other countries are facing challenges, however operating. Asia Landbridge (China – South East Asia) as well as Eurasia Landbridge (China – Europe Train) are fully operating. India with lockdown also affecting cargo flows. Land operations in the Americas are now also showing constraints, but still working close to normal.

  • Europe 

(May 19, 2020) -

Transportation of all goods by DB Schenker is not affected by travel restrictions for most of the 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 case lead times and / or costs cannot be secured selectively, we kindly ask for your understanding. System Premium shipments are still accepted and will be handled with highest priority and fastest possible lead times. Nevertheless, under the given circumstances, we need to suspend the money back guarantee of our System Premium product until further notice.

As some receivers closed their operations, we ask all shippers to check the delivery possibility with the consignee. DB Schenker reserves the right to send back shipments that cannot be delivered and charge the return accordingly or charge for storage in our warehouse.

  • Asia Pacific 

(May 19, 2020) - There are no significant updates in operational status from the previous advisory. CN-VN border congestion is improving gradually, with our road solutions to SEA also picking up. Our 4 block trains running from CN to EU continues to be in demand. Delays primarily due to stringent check at borders still in place.

(May 13, 2020) - Strong volume recovery in Vietnam, Malaysia, Thailand, Indonesia, Australia, New Zealand, with the easing of relevant restrictions in some of the countries.

The Vietnam authorities have eased restrictions, while Singapore authorities have extended restrictions until June 1. We continue to monitor the respective situations and will advise accordingly.

India authorities are adjusting restrictions in states via Red, Yellow and Green Zones to calibrate extent and enforcement of measures (please refer to our India website for detailed information via download).

Japan, Korea, Singapore, Australia, New Zealand Land Transport are still in operation at adequate levels, albeit with constrains and delays expected.

Thailand, Malaysia, Indonesia and the Philippines operate below pre-COVID-19 levels.

DB Schenker India can arrange security escort services where needed to move your essential cargo, to reduce roadblock, and to facilitate the transit time. Contact your Account Managers for more details.

  • Middle East/Africa 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

(May 13, 2020) - Lockdown in South Africa will be eased down May 1 onwards in phases. It will increase DB Schenker’s capacity for local operations. For more information, please get in touch with your account manager.

(May 13, 2020) - In Egypt curfew remains in place, Trucks will not be allowed on the main highways during such hours (8 pm - 6 am daily). DB Schenker in Egypt has an appropriate business continuity plan in place to adhere to such restrictions. Please get in touch with your Account Manager for more information.

(May 13, 2020) - Land distribution to GCC and Levant countries (via Saudi Arabia) have been suspended for general cargo. The commodities exceptional to this rule are food items, medical items, military / relief / aid items.

  • Americas 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

(May 13, 2020) - Mexico: US / MEX / CAN / C.A. are working normally but with less capacity to dispatch on time from Border to Final destination (USA side). High volume on Sea Drayages.

Canada: Operations mostly running normally. No issues with capacity. We have segregated shifts to avoid overlap and are implementing social distancing.

USA: Capacity still loose, however certain regions at premium.

Brazil: Working normally. Borders between Brazil and other countries have reduced the working hours and staff.

  • Global

(May 19, 2020) - There are no significant updates in status from the previous advisory.

Together with our customers we continue preparations to reopen sites and to ramp up volumes following the easing of governmental restrictions and respective markets demand.

Protection of our staff and keeping our customers’ businesses running continue to be our core focus.

Therefore BCP‘s come into effect around the world, be it dedicated guidelines and preventive measures like social distancing, temperature control or placement of sanitizing stations, but also controlling of respective health and safety regulations. To secure our people and their work adding value to our customers’ business.

We continue to appreciate the ongoing and close conversation with our customers to jointly anticipate any changes or requirements and act accordingly:

➢ In case you are in need of temporary space, reach out to your DB Schenker Account Manager or local contact person!
➢ Please stay in touch and communicate with us frequently on forecast!

  • Europe 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

(Apr 28, 2020) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.

Italy shows strong indications to constrict and shut down operations that are non-critical to the health of the citizens. Consumer operations around the region are operating at full speed in order to fulfill the distribution of food, sanitary, and healthcare-related products to Europe.

Southern Europe continues to show a stronger impact as Northern Europe deployed social distancing and work-from-home (WFH) initiatives in advance of the increase.

Automotive and industrial operations have restricted their activities across the region to minimal levels.

  • Asia Pacific 

(May 19, 2020) - There are no significant updates in operational status from the previous advisory.

Greater China North East Area of Jilin is experiencing a renewed outbreak. Our operations in the area remain open and unaffected but placed on high alert and will be monitored closely.

Malaysia CMCO (Conditional Movement Control) extended until June 8. All Warehouse operations back online, albeit some with reduced resources (limited) and under strict hygiene SOP.

Philippines Enhanced Community Quarantine (ECQ) for National Capital Region, Luzon (Laguna) and Cebu province is extended until May 31.

Japan has lifted State of Emergency in most prefectures. Tokyo and Osaka continue under SOE. However, our operations remain unaffected.

Major India cities are still under lockdown (e.g. Mumbai), although factories are allowed to gradually open. Labor continues to be the main challenge. All Schenker India warehouses are open (with one exception). We continue to monitor the situation closely for any potential impact to operations.

Australia and NZ have eased restrictions.

Vietnam is virtually back to normal. Indonesia is also easing some restrictions even though cases are up. The situation in Indonesia will be monitored closely.

(May 13, 2020) - Indonesia extends restrictions up to May 22. Some deliveries especially for non-primary needs / products are also cancelled due to the restriction.

Myanmar government has initiated stop work order for factories (and other) operations until approval to re-open.

Thailand extended restrictions until May 31.

India authorities are adjusting restrictions in states via Red, Yellow and Green Zones to calibrate extent and enforcement of measures (please refer to our India website for detailed information via download).

Singapore has announced a further extension of ‘Circuit Breaker’ restrictions until June 1. With different countries at varying status, even at provincial / prefecture levels, we are closely monitoring all our markets and, where appropriate, also taking the pre-emptive steps planning for recovery and resumption incrementally or in phases.

While governmental imposed restrictions in all APAC countries continue, our service levels are maintained so far serving our customers.

  • Middle East/Africa 

(May 19, 2020) - There are no significant updates in status from the previous advisory.

(May 13, 2020) - Lockdown in South Africa will be eased May 1 onwards in phases. For more information, please get in touch with your Account Manager.

  • Americas 

(May 19, 2020) -

➢ USA: As the country re-opens, DB Schenker is following the guidelines of each individual state as they begin the re-opening process.
➢ Canada: Customer non-essential sites remain closed until further notice.
➢ Mexico is operating per government mandate; we have implemented social distancing guidelines in all facilities and ensuring all safety measures are taken to protect employees and operation.
➢ Argentina: Non-essential facilities reopened on May 12.

  • Global Projects & Industry Solutions

(May 13, 2020) - DB Schenker is in constant contact and regular exchange with carriers and operators of multi-purpose vessels (MPP). Bookings can be placed for break bulk, out-of-gauge cargo, but also for cargo types, which are normally transported containerized as break bulk shipping capacity is widely available. Some operational delays are expected following various lockdowns and restrictions announced and implemented. In addition, quarantine measures are in place for various ports which have an impact on lead time and costs.

Our dedicated Global Projects & Industry Solutions teams around the world are fully operational and support clients to develop customized transport solutions for all break bulk or out-of-gauge shipments or any other project shipment independent of markets or trade lanes.

  • Fairs, Events and Special Logistics

(May 13, 2020) - The outlook in the global exhibition industry is promising. With Germany and China, two of the world’s three biggest markets for the exhibition industry took a big step forward towards the reopening of the exhibition industry and other countries are likely to follow in the next weeks. We are in close contact with the leading exhibition organizers and associations worldwide and continue to monitor all developments closely.

Our Global Fairs & Events Service Center is up to date and available to answer all your questions and assist you in all situations with tailormade solutions.

Reach out and contact our colleagues at customerservices.fairs@dbschenker.com

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 help instill the social distancing guidelines put in place by public authorities or the government in many countries. Our first priority is the health of our employees and partners. We adhere to the recommendations of health experts, especially WHO, related to, for example, hygiene precautions.

The next customer advisory will be the May 27 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 13, 2020

COVID-19 Customer Advisory Global Update – May 5, 2020

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.