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DB Schenker Air Freight Intermodal Solutions Airplane Inside Loading

Customer Advisory COVID-19 Global Update

August 18, 2020

Please here the most recent edition of our COVID-19 global customer advisory update. 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 remains continuously up to date about the evolving situation. Please continue to be engaged with your DB Schenker Account Managers on your latest plans, prices and projections. They will invest the utmost effort to support your busines with corresponding solutions.

Global Market Updates

  • Global

(Aug 18, 2020) - Maintenance schedules of freighter aircrafts have immediately led to a supply reduction in the airfreight market. These maintenance schedules from airlines come into effect as the utilization of aircrafts (block hours per day) was significantly increased during the first half of 2020. The additional flights and operating hours were required to provide capacity in the first weeks and months of the COVID-19 pandemic as many passenger flights got cancelled causing an immediate shortfall in supply. The airlines are preparing themselves with the current maintenance schedules for the upcoming peak season in which a shortage in capacity supply is expected and forecasted. How critical airfreight supply is currently was already immediately observed as rates were increasing on major trades due to the freighter capacity shortfall. In addition to the already tight capacity situation the demand for medical equipment (e.g. personal protective equipment = PPE) remains volatile as the COVID-19 pandemic impacts vary strongly from region to region and country by country and a potential demand due to second or third wave cannot be forecasted. Therefore, an even more advanced and detailed planning for the peak season is required to ensure capacity access!

➢ We kindly request for your support on a close collaboration to ensure we plan for a smooth and peak season and work hand in hand between your local DB Schenker team and yourself during this critical time to keep supply chains stable. It is our ambition to be your provider of choice for your airfreight transportation and to offer you a capacity situation that enables your business to be successful.

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 

(Aug 18, 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 are running as scheduled. In some areas, our cross-border trucks might experience some minor delays.

➢ Contact your local DB Schenker Account Manager on priority routes for PPE.

  • Asia Pacific 

(Aug 18, 2020) - Tight controls remain in several APAC countries due to resurgence of infection rates. We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.

(Aug 4, 2020) - Australia, State of Victoria is under Stage 4 (highest level) lockdown in the city (Stage 3 restrictions for non-essential movement for rest of Victoria) w.e.f. midnight Aug 5. The Philippines authorities will transition to General Community Quarantine (GCQ) measures in the National Capital Region (NCR), as well as Bulacan, Cavite, Laguna and Rizal provinces from August 4 to 19 to 31. Similar reinstatement / extension of restrictions is also seen in Indonesia, several prefectures in Japan and some parts of Vietnam. Movement restrictions generally may cause some delays, albeit no significant impact to our operational status.

Though resurging COVID-19 infections are evident in some countries across APAC, our air freight operations remain stable and available to support customer needs. Delays are expected in customs clearance and transportation as lockdowns in some countries affect availability of workforce, including ports, airports, etc. Alternatives to move / transport cargo via other gateways / routes are established. Customers may contact the respective DB Schenker representatives for support or solutions should it be required.

APAC countries are opening with the majority allowing manufacturing activities. Congestion in Greater China remains, albeit improving gradually. Capacity is expected to remain volatile.

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

  • Middle East/Africa 

(Aug 18, 2020) - Overall, the air freight operations in the countries remain uninterrupted even as Oman, Kenya, and South Africa slip into partial curfew. We continue to serve our customers. Our regional and global preferred carriers are seen to gradually increase the frequency of passenger cargo flights. For more information, get in touch with your DB Schenker Account Manager.

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

➢ Please contact your DB Schenker Account Manager for more information on additional routes.

  • Americas 

(Aug 18, 2020) - There are no significant changes.

South America to other regions: Services continue but with some minor flight scheduling disruptions / delays, which are more pronounced into Peru, Chile and Bolivia as noted.

(Aug 4, 2020) - USA – China
➢ Sufficient capacity for USA exports to key destinations in China. Large number inbound scheduled freighter flights and charters continue supporting USA exports providing capacity to meet demands on the return leg.

➢ Rate levels are relatively low but remain above pre-COVID-19 levels.

USA – Asia (excluding China)

➢ Destinations with tight capacity continue to be Australia and India from all USA origins. Korea and Singapore with tight capacity and some backlogs from the USA eastern gateway cities of JFK, ATL and MIA. Market pricing moderating from prior highs, but still well above pre-COVID-19 levels.

➢ Flight operations via the DB Schenker Euro Hub in FRA to BOM and Part Charter capacity from ORD – SYD are supporting these high demand destinations.

USA – Europe

➢ Market demand is moderate with sufficient capacity to avoid backlogs. Market pricing has moved downwards, but as countries begin to reopen, the possibilities of renewed demand with accompanying upward pricing pressures is possible.

➢ DB Schenker maintaining round trip freighter Flight Operations: 3 x week ex ORD & ATL to FRA and back.

USA – Latin Am / Latin Am to Europe and APAC

➢ Intra-Americas: Market demand is moderate with sufficient freighter capacity to most destinations from the USA to Latin Am. Exceptions being to and from Peru and Bolivia where capacity is tight. Market pricing trending higher for North America to Brazil, Peru, Bolivia, Argentina and most Central American countries.

➢ South America exports to other regions: Sufficient capacity but market pricing trending much higher. Some passenger flights are returning, however far from previous frequencies and not providing much additional capacity. The principle carriers for the region have declared chapter 11 bankruptcy (re-organizing). Services continue but with some minor flight scheduling disruptions / delays.

  • Global

(Aug 18, 2020) - The heavy spike of volumes on Asia to North America continues, exports from Asia to Europe are at a very comfortable level, on both trades all carriers are successful in pushing strongly for increased revenue through general rate increases or ad hoc rate premiums to ensure equipment and space. A number of loops are already fully booked into the month of September. At the same, time capacity reductions on the two main trades are disappearing. Instead we see a lot of additional tonnage on above mentioned lanes as Asia phased in until end of September; on the TPeb even until end of October. At the same time, we experience a more severe equipment shortage especially for 40’hc in all main ports in Central and South China as well as in main Origins in Southeast Asia. This makes it very important to plan volume forecast.

The situation for Europe to the Far East relaxes while the Transatlantic ex Europe rather gets weaker on the utilization; carriers continue with blank sailings in an attempt to keep the rate levels stable.

Liftings ex Asia into Middle East and Africa have recovered, but exports into Latam still struggle, though on a more stable level compared to two weeks ago.

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 six weeks due to possible future changes.

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

With massive vessel withdrawals, an 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

➢ DB SchenkerOcean priority product on all main trades which guarantees loading within a fixed window.
➢ Various DB 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.
➢ DB 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).
➢ DB 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.

Contact your DB Schenker Account Manager regarding Personal Protective Equipment services ex China Europe.

  • Europe 

(Aug 18, 2020) - On trades to the West, the utilization to North America has improved to over 90%, however LATAM destinations are in decline. It is expected that carriers will take additional actions on curtailing the capacity.

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 

(Aug 18, 2020) - Though resurging COVID-19 infections are evident in some countries across APAC, our Ocean operations remain stable and available to support customer needs. Delays are expected in customs clearance and transportation as lockdowns in some countries affect availability of workforce, including ports, airports, etc.

➢ Alternatives to move / transport cargo via other gateways / routes are established. Customers may contact the respective DB Schenker representatives for support or solutions should it be required.

Ex China, Ocean Freight is stabilizing, and blank sailings are reduced, but still impacting all trades. Whilst market demand to Middle East remains week, 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 regulation.

  • Middle East/Africa 

(Aug 18, 2020) - Intra Middle East trade is seen to pick up with an increase in market demand predicted in Q4.

➢ Please get in touch with your DB Schenker Account Manager for the latest rates.

  • Americas 

(Aug 4, 2020) - On the exports ex NORAM it is worthwhile to mention that especially to Asia, the vessel utilization remains strong with no inflation of market rates expected. Void sailings and service suspensions causing severe shortage of space on all North

American gateways resulting in high vessel utilization factors across the board. Rollovers and yield management are being applied by carriers. Extra loaders deployed and services being reinstated on ad-hoc basis.

  • Global

(Aug 18, 2020) - Europe Land is fully operational and available for business, managing existing constraints. 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– South East Asia) as well as Eurasia Landbridge (China – Europe Train) are fully operating. Land operations in the Americas are also showing constraints, but still working close to normal.

  • Europe 

(Aug 18, 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.

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 one of the strongest and most resilient networks in Europe operating across 38 countries. 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 

(Aug 18, 2020) - Asia remains at different levels regarding the COVID-19 crisis but is being heavily supported by our domestic road freight, Asia road International (Asia Landbridge), and Asia-Europe train transport (Eurasia Landbridge). Congestion at the China / Vietnam border due to a recent COVID outbreak in Vietnam is increasing journey times by 1 to 4 days. The remaining borders within Asia are back to normal and are being monitored closely.

National borders within Australia are still “freight friendly” with closures only affecting people movements.

➢ Eurasia Landbridge

Eurasia Landbridge has doubled the volume capacity since March 2020 owing to the reliable lead time during COVID-19.

Rail services include LCL, FCL, single container, company train, and block train services on a weekly basis, both eastbound and westbound. Strong road networks and services at origin and destination ends enable seamless end-to-end services.

Lead time terminal to terminal is 16 - 18 days westbound, 18 - 20 days eastbound. Also, we launched a weekly block train Xian to Rostock with a lead time of 12 days.

➢ Asia Landbridge

Our Asia Landbridge has also doubled volume capacity since March 2020 with a compelling lead time and low freight cost.

Asia Landbridge also supports Air and Ocean connections by delivering the cargo to the nearest gateway with capacity, providing in-transit change of mode services when destination airspace is restricted or air capacity limited.

Both FTL and LTL services are available within the Asia continent, with daily departures for FTL complimented with our LTL service which has three departures southbound and twice weekly northbound.

➢ Domestic Land

Operating in 17 countries across Asia, our offered volumes and operations are back to normal. We are constantly tailoring our services to enable customers to meet the changing demand from the current erratic activity spike; recently we have developed a contactless POD signing process to facilitate a safe cargo handover.

  • Middle East/Africa 

(Aug 18, 2020) - International GCC land border connecting Saudi Arabia to other countries has been opened for land transportation / land freight movement with limited operations.

  • Americas

(Aug 18, 2020)  -

➢ USA: Capacity at the California / Mexico border remains tight. Market costs in Chicago are starting to rise.
➢ Brazil: Brazil has been continually working and they are shipping across the borders now with a reduced time.
➢ Mexico: 100% fully operational.
➢ Canada: No issues on capacity. Montreal linehaul running daily – ran 100% every day last week and had extra trailers each night. Chicago inbound running daily – averaged 94% last week.

  • Global

(Aug 18, 2020) - Global situation is diverse, increase of restrictions especially in APAC. In most other regions we observe business getting back to regular performance levels and beyond. Hence, we keep up our customer support and offer:

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

Regarding our global operations, we are committed to safety and do prioritize protection of our staff and keeping our customers’ businesses running. BCPs are in place and monitored around the world with dedicated guidelines and preventive measures.

  • Europe 

(Aug 18, 2020) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.

  • Asia Pacific 

(Aug 18, 2020) - Tight controls remain in several APAC countries due to resurgence of infection rates. We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.

(Aug 4, 2020) - Australia, State of Victoria is under Stage 4 (highest level) lockdown in the city (Stage 3 restrictions for non-essential movement for rest of Victoria) w.e.f. midnight Aug 5. Due to reinstatement of movement restrictions, delays are expected with potential temporary closures possibly impacting operations for non-essential sectors over the coming days.

The Philippines authorities will transition to General Community Quarantine (GCQ) measures in the National Capital Region (NCR), as well as Bulacan, Cavite, Laguna and Rizal provinces from August 4 to 19 to 31. Similar reinstatement / extension of restrictions is also seen in Indonesia, several prefectures in Japan and some parts of Vietnam, Movement restrictions generally may cause some delays, albeit no significant impact to our operational status.

For India, there have been no significant operational updates. Please refer to our India website for detailed information via download.

For Greater China, lockdowns in several northern cities as reported previously, continue to not have significant impact on our operations. Hong Kong situation deteriorated and will be closely monitored.

Indonesia extended PSBB restrictions for another 2 weeks which means a slight reduction in labor operational capacity. Malaysia’s RMCO restrictions remain until August 31.

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 

(Aug 18, 2020) - All DB Schenker contract logistics facilities in MEA continue to operate with appropriate health and safety standards even as Oman, Kenya, and South Africa slip into partial curfew.

  • Americas 

(Aug 18, 2020) -

➢ Brazil: Our health and safety protocols remain in place and working successfully. All operations are working without interruption.
➢ United States: No major updates.
➢ Canada: No major updates. All operations are open and there are no service impacts.

  • Global Projects & Industry Solutions

Our dedicated Global Projects & Industry Solutions teams around the world are fully operational and support clients to develop tailored 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

Our teams are in close contact with the leading exhibition organizers and associations worldwide and continue to monitor all developments closely. As the situation varies in all countries, our Global Fairs & Events colleagues are 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 September 1 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.