Shape Shape 161110_icono_product_teaser icon-arrow-left icon-arrow-right icon-first icon-last 161110_icono_product_teaser 161110_icono_product_teaser location-pin 161110_icono_product_teaser 161110_icono_product_teaser contact-desktop-white careers-desktop-white

DB Schenker Air Freight Intermodal Solutions Airplane Inside Loading

Customer Advisory COVID-19 Global Update

June 9, 2020

Please find here the most recent edition of the COVID-19 global customer advisory update. Economies worldwide are heading towards a new normal. Every other week 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

(Jun 9, 2020) - The airfreight market remains very volatile in the current COVID-19 pandemic with capacity shortage across all regions. As market demand is declining due to less PPE demand in China, there is also a decline in passenger cargo flights in recent weeks. Overall global capacity remains short averaging out around –26% year-on-year. The capacity situation is also forecasted to be impacted by maintenance checks of the airfreight freighter fleet in the coming months leading to a remaining shortage in global supply. One of the key factors in the market that remains unpredictable for the remaining months in 2020 is the potential return of international passenger flights and related belly capacity. This in addition to the short and mid-term consumer behavior and inventory management in the second half of 2020 will highly impact the demand development in the airfreight market.

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 

(Jun 9, 2020) - There are no significant updates in status from the previous advisory.

(Jun 2, 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, 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 

(Jun 9, 2020) - There are no significant updates in operational status from the previous advisory.

(Jun 2, 2020) - APAC countries are slowly opening, with most countries allowing manufacturing activities. Pick up is expected in the coming weeks.

Congestion in Greater China remains, albeit improving gradually. Capacity is expected to remain volatile.

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. DB Schenker is now also able to support cross border trucking within India.
➢ Demand for ex China is stabilizing. Backlog at all China airports, requiring at least 48 hours advance notice for tendering in of cargo.

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

  • Middle East/Africa 

(Jun 9, 2020) - While countries in the region begin to relax restrictions, passenger flights continue to be suspended. Except in the UAE, limited passenger services have begun on selected routes. DB Schenker in the region can manage the current demand with available cargo capacity. For more information, please get in touch with your Account Manager.

(Jun 2, 2020) - 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 

(Jun 9, 2020) - USA – China

➢ With the continuing large number of inbound freighter flights, scheduled and charters, USA exports have sufficient capacity to meet demands.
➢ Rate levels have dropped but remain above pre-COVID-19 levels. 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 moderating from prior highs, but still well above pre-COVID-19 levels.

USA – Europe

➢ Demand is moderate with sufficient capacity to avoid backlogs. Pricing has moved downwards, but as countries begin to reopen possibilities of renewed upward pricing pressures.
➢ Schenker to maintain round trip 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. Peru specifically has developed
severe capacity issues. Pricing trending higher to some markets.
➢ Two principle freighter carriers for the region have declared chapter 11 bankruptcy (re-organizing). Services continue but with some flight scheduling disruptions / delays.

  • Global

(Jun 9, 2020) - While the volume outlook for June seems to be positive and increasing, the signs for July and the corresponding peak season during Q3 / 2020 are still rather uncertain whether the current dynamic on individual lanes are due to a re-stocking or a continued restoring of volumes.

From current perspective of market participants, the overall outlook for July appears less dynamic than June.

Generally, the easing of lockdown measures in many countries help the demand for volumes to move up, resulting into partly even unexpected high utilizations, creating in main trades roll over situations and very tight space scenarios. The one or the other sailing that was initially planned for cancellation, has been re-deployed again.

With China output on production around 80% of possible capacity (was around 70-75% in April) due to lack of demand, the industry overall is still in shock level due to the biggest decline ever seen – the current “improvement” is a change in status from appalling to just low volumes.

2M have announced the deployment of a “sweeper” service – different to various press releases, we understand that this service is foreseen to run about 3 times during Q3 to avoid large roll overs without compromising on rates.

Blank sailings / suspension programs / service mergers / combined service loops remain the tool to drive supply and demand forward and will be continued throughout the entire 3rd quarter. About 75 blank sailing sailings have been announced already for this time period.

Should July develop slowly, carriers will not shy away from further capacity reductions and void sailings.

Cargo will remain under strict yield control, we expect a number of GRI’s announced for mid-June will materialize at least in parts (June 1 increases have been realized already), furthermore carriers take a close look on the bunker development and its scheduled adjustment for Q3. Where rates will hit unsustainable levels due to reduced BAF level, carriers will adjust the contracts strictly to ensure sustainable uplift or will execute a very strong push for GRI’s impacting liftings from Q3 / 2020 onwards.

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 at 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 withdrawals, uncertain outlook on vessel utilizations and partly huge impacts on port terminals, we need to prepare for changing schedules and 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, less frequent departures and sudden surcharges possibly resulting in higher costs for the supply chain.

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 

(Jun 9, 2020) - On trades to the West, the utilization to North America has improved to over 90%, however LATAM destinations are under decline. It is expected that carriers will take additional actions on curtailing the capacity.

(Jun 2, 2020) - On exports ex Europe to the East, carriers still report strong booking situations with only limited shortfalls. 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.

All European Ocean Freight Branches are fully functioning operationally.

  • Asia Pacific 

(Jun 9, 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.

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 

(Jun 9, 2020) - There are no significant updates in status from the previous advisory.

(Jun 2, 2020) - Vessel utilization now between 95% to 100%. The share of blank sailings has reduced to less than 30% to the Middle East and less than 20% to 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.

  • Americas 

(Jun 9, 2020) - There are no significant updates in status from the previous advisory.

(Jun 2, 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.

  • Global

(Jun 9, 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 gives 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 also showing constraints, but still working close to normal.

  • Europe 

(Jun 9, 2020) -

Restrictions directly or indirectly affecting the transportation of goods are largely lifted in an increasing number of European countries. For any potential cases of disruptive conditions, we follow our pre-defined contingency plans to ensure flows of cargo as much as possible.

During the last weeks we had suspended the money back guarantee of our System Premium product due to the unpredictable and volatile circumstances. We are happy to announce that effective immediately we will restore the money back guarantee for System Premium shipments. Delivering superior quality for our customers was always and will remain the highest priority for us – for that reason the restoring of the money back guarantee was of utmost importance for us.

With increasing economic activity in many European countries, we are adapting our transport service offerings daily to the needs of our customers. Are you restarting or expanding your international business activities? DB Schenker Land is your partner with the strongest and most resilient network across 38 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.

Some receivers continue to have limited operations and we ask all shippers to check the delivery possibility with the consignee to avoid cost for storage or return shipments.

  • Asia Pacific 

(Jun 9, 2020) - There are no significant updates in status from the previous advisory.

Cross border freight traffic remains a strong alternative to the significantly reduced airfreight sector. Borders across Asia remain open for freight with an easing of congestion. Drivers are still required to undergo health-checks. Europe is consistently being serviced via our regular trains from China. The services include block trains, FCL and LCL. DB Schenker Malaysia is now 100% operational across all sites, domestic and international cross border transport back to normal. Thailand is 90% back to normal with the curfew reduced to between 23:00 and 03:00 hrs. India mostly remains under lockdown with the government extending restrictions until June 30. A driver shortage and capacity constraints with trailers and long-hauls is putting upward pressure on domestic India transport rates. DB Schenker India can arrange security escort services where needed to move your essential cargo to reduce time at road checkpoints.

Strong volume recovery in Vietnam, Malaysia, Japan, Korea, Singapore, Indonesia, Australia, New Zealand, with the easing of relevant restrictions in some of the countries.

Thailand volumes remain below same time last year, mainly impacted by reduction in the automotive industry.

Bangladesh volumes affected by India border closures. Myanmar airspace restricted but trucks can cross the border.

India authorities adjusted restrictions in states via Red, Yellow and Green Zones to calibrate extent and enforcement of measures. India expects to return to 80% production in a few weeks (please refer to our India website for detailed information via download).

  • Middle East/Africa 

(Jun 9, 2020) - There are no significant updates in status from the previous advisory.

(Jun 2, 2020) - From June 1, lockdown in South Africa has been eased down to level 3. It will increase DB Schenker’s capacity for local operations. For more information, please get in touch with your account manager.

(Jun 2, 2020) - International GCC land border connecting Saudi Arabia to other countries has been opened for land transportation / land freight movement with limited operations.

  • Americas

(Jun 9, 2020) - There are no significant updates in status from the previous advisory.

(Jun 2, 2020) - Mexico: US / MEX / CAN / CA are working normally but with less capacity to dispatch on time from Border to Final destination (USA side).

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. Main States remain in quarantine.

  • Global

(Jun 9, 2020) - Global restrictions are further easing up. With regional exceptions, still more and more sites are opening again or preparing for ramping up, getting back to full performance, as higher volumes are coming in.

We continue to offer close communication and anticipate forecast and demand with our customers:

➢ 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!

No change in prioritizing protection of our staff and keeping our customers’ businesses running. BCP‘s are in place and monitored around the world with dedicated guidelines and preventive measures, e.g. social distancing, temperature control or placement of sanitizing stations.

  • Europe 

(Jun 9, 2020) - There are no significant updates in status from the previous advisory.

All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.

  • Asia Pacific 

(Jun 9, 2020) - There are no significant updates in operational status from the previous advisory.

NZ has declared situation back to normal, free of COVID-19. Australia continues to ease restrictions.

All Schenker warehouses in India are now open, though Mumbai continues to be in lock-down till end of June.

Japan has lifted the State of Emergency in all prefectures.

In Thailand, restrictions are also easing, all warehouses are open.

Singapore announced gradual and phased easing of restrictions.

The Philippines now ease restrictions to General Community Quarantine (GCQ).

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 eased CMCO (Conditional Movement Control) to Recovery Movement Control Order (RMCO) till Aug 31. All Warehouse operations back online, albeit some with reduced resources (limited) and under strict hygiene SOP.

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.

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

India authorities adjusted 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).

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 to serve our customers.

  • Middle East/Africa 

(Jun 9, 2020) - There are no significant updates in operational status from the previous advisory.

(Jun 2, 2020) - From June 1, lockdown in South Africa has been eased down to level 3. It will increase DB Schenker’s capacity for local operations. For more information, please get in touch with your Account Manager.

  • Americas 

(Jun 9, 2020) -

➢ All CL America sites are open and operating without limitations following government regulations and guidelines of each individual country and state.
➢ Brazil: Government reports indicate higher cases of COVID-19 in country. We as an organization continue to intensify the sharing and education of leadership and staff on social distancing and proper sanitation protocol in all facilities.

  • Global Projects & Industry Solutions

(Jun 2, 2020) - There are no significant updates in status from the previous advisory.

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

(Jun 9, 2020) - There are no significant updates in status from the previous advisory.

The outlook in the global exhibition industry is improving. More and more countries are lifting their bans on organizing trade fairs and all major exhibition organizers are getting ready for the industry to restart. 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 support 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 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

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.