DB Schenker Air Freight Intermodal Solutions Airplane Inside Loading

Customer Advisory COVID-19 Global Update

September 29, 2020

Please find here the newest 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

Our customer teams remain 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 business with corresponding solutions.

Global Market Updates

  • Global

(Sep 29, 2020) - The airfreight market is heading into peak season. The capacity situation ex Asia Pacific is projected to be very critical considering ongoing airline fleet groundings and flight cancellations as demand from the major economies in Asia Pacific is increasing. Various product launches have led in the past to tight capacity situations. Some of the major companies already advised their product releases for the fourth quarter of this year. This additional demand for capacity in the market will lead to an even more critical situation in 2020 as the majority of capacity is now being supplied by freighter flights and operators. It is of outmost importance to align on your forecast ensuring a stable uplift of your shipments. We kindly request your support to reach out to your local teams and Account Managers to prepare for the coming weeks and months in 2020.

(Sep 16, 2020) - DB Schenker has launched and extensive global charter flight operations program to mitigate the capacity impact for our customers and provide secured capacity on key trade lanes. The charter program has been extended in preparation for the upcoming peak season and required freighter capacity. It is the priority to provide stable connections during the current volatile airfreight market situation and airline flight schedule changes. The charter flights are connecting the key world’s leading economies in the world covering trades between China, USA, Middle East and India. Freighter capacity has been a key supply due to the flight cancellations caused by COVID-19. DB Schenker has setup approximately 10 connections per week between Shanghai, Beijing, Zhengzhou, Hong, Chicago, Atlanta, Dubai, Bombay and Frankfurt. In addition, some part charter flights have been contracted on other trades such as Hongkong to USA as well as Hongkong to Europe.

The peak season in 2020 is expected to lead to a capacity shortage due to the global capacity situation, extensive passenger flight cancellations and airline fleet groundings. Please reach out to your DB Schenker Account Managers to prepare a joint reviewing of your forecast and provide solutions to ensure capacity access on your impacted trades. We are confident to be your supplier of choice during this volatile market situation providing the best possible solutions!

➢ We kindly request for your support on a close collaboration to ensure we plan for a smooth 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: 4 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 

(Sep 29, 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.

  • Asia Pacific 

(Sep 29, 2020) - Indonesia authorities have extended large scale restrictions until Oct 11. Myanmar has also imposed lockdown restrictions as of Sep 21, with notable impact on the garment industry (exports on all lanes) as factories are expected to be shut from Sep 24 – Oct 7.

Logistics and Transport remain classified as essential services and hence are NOT affected particularly. Though resurging COVID-19 infections are evident and tight controls remain 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 if required.

As APAC countries are opening with the majority allowing manufacturing activities, capacity is expected to remain volatile. We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.

Having recently launched our Global Flight Operations program, we have established air charter initiatives to provide stability particularly with India and China markets.

➢ We also 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 

(Sep 29, 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.

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 

(Sep 29, 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.

➢ Inbound volumes particularly from China remain high. Market demand ex China is strong and expected to be even stronger with more capacity constraints after Golden Week (1 - 9 Oct).

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 – BOM and Part Charter capacity from ORD – SYD are supporting these high demand destinations.

➢ Outbound USA to OZ in particular is tight.

USA – Europe

➢ Further charter flights have been launched with the Global Flight Operations Program to provide additional air cargo capacity to Europe. These flights are connecting Atlanta and Chicago with Frankfurt, Germany and other surrounding Central European markets.

➢ Market demand is moderate but growing. Market pricing has stabilized after some downward movement during the summer. As countries continue with ‘reopening’ renewed demand with its upward pricing pressures is anticipated, becoming more acute in the 4th quarter.

➢ 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 USA to Peru, Chile and Bolivia where capacity is tight and hampered by freighter services changing scheduled movements. Market pricing is trending higher North America to Brazil, Peru, Bolivia and Argentina and most Central American countries.

➢ South America exports to other regions: Sufficient capacity but market pricing much higher. Some passenger flights returning, but 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, which are more pronounced into Peru, Chile and Bolivia as noted.

  • Global

(Sep 29, 2020) - Capacity ex Asia runs at fullest utilization, in addition the extra loader programs continue. There will only be a minimal impact on volume following Golden Week, the market is expected to produce full ships until Chinese New Year in Jan 2021. At the same time, rates are still on the rise. Additional pressure is created through a heavy equipment deficit (esp. 40’hc) in Asia (China main ports and Vietnam) as well as congestion in various locations in the World (e.g. Australia due to strike, but also FLX / UK, South Africa, India, Westcoast Canada). With the situation to remain unchanged in October and beyond, we expect rate levels moving up and equipment levels to remain very critical. Booking forecast of eight weeks is preferred by the carriers. Given this positive momentum, industry analysts have revised their earlier more negative anticipation of the ocean freight to a more moderate negative 6 % volume growth for 2020, with an outlook of a growth in 2021 of 2021.

This makes it very important to plan volume forecast and be open to re-routing of cargo (for congested destinations).

The situation for Europe to the Far East relaxes, also the Transatlantic ex Europe is improving and shows currently utilizations around 100%; carriers continue with blank sailings trying to keep the rate levels stable.

Only exports ex Europe to South America remain depressed.

Liftings ex Asia into Middle East and Africa have recovered, also exports ex LATAM improved.

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 to Europe.

  • Europe 

(Sep 29, 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 

(Sep 29, 2020) - Indonesia authorities have extended large scale restrictions until Oct 11. Myanmar has also imposed lockdown restrictions as of Sep 21, with notable impact on the garment industry (exports on all lanes) as factories are expected to be shut from Sep 24 – Oct 7.

(Sep 16, 2020) - Logistics and Transport remain classified as essential services and hence are NOT affected particularly.

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 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 loading 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 

(Sep 29, 2020) - An equipment shortage has been seen in Oman and Saudi Arabia, however, overall Q4 looks positive.

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

  • Americas 

(Sep 29, 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. Roll-overs and yield management are being applied by carriers. Extra loaders deployed and services being reinstated on ad-hoc basis. Asia to North America is peaking further and bookings Asia to South America have come up massively during the past two weeks. We continue to monitor the situation.

  • Global

(Sep 29, 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 Land bridge (China – South East Asia) as well as Eurasia Land bridge (China – Europe Train) are fully operating. Land operations in the Americas are also showing constraints, but still working close to normal.

  • Europe 

(Sep 29, 2020) - Restrictions directly or indirectly affecting the transportation of goods are still largely lifted in the 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 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 

(Sep 29, 2020) - Asia continues to remain 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 remains at Pingxiang (China / Vietnam border) due to an increase in the inspection rate increasing journey times by up to 7 days. However, a neighboring border crossing is being utilized as an alternate channel to meet critical lead-times. Additionally, a recent outbreak near the Thailand / Myanmar border has led to the closure of Yangon and Thilawa crossings with Myawaddy being utilized to keep cargo traffic flowing. The remaining borders within Asia are back to normal but being monitored closely. At this juncture, there are no material delays apart from the China / Vietnam border.

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 Land bridge has also doubled volume capacity since March 2020 with a compelling lead time and low freight cost.

Asia Land bridge 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 

(Sep 29, 2020) - International GCC land border connecting Saudi Arabia to other countries has been opened for land transportation / land freight movement with limited operations.

  • Americas

(Sep 29, 2020)  -

➢ USA: Full truckload capacity remains very tight in certain regions of the US. The Mexican border, the west coast, and most of the mid-west are seeing scarce capacity and high freight rates.
➢ Brazil: Market is running in normal conditions.
➢ Mexico: 100% fully operational.
➢ Canada: No issues on capacity.

  • Global

(Sep 29, 2020) - Global situation and consequently regional restrictions are still heterogeneous. Our operations and customer services remain stable. Hence no change in prioritizing 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. Also do we keep up our constant and short-term customer support:

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

  • Europe 

(Sep 29, 2020) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.

  • Asia Pacific 

(Sep 29, 2020) - Indonesia authorities have extended large scale restrictions until Oct 11. Myanmar has also imposed lockdown restrictions as of Sep 21, with notable impact on the garment industry as factories are expected to be shut from Sep 24 – Oct 7.

(Sep 29, 2020) - Logistics and Transport remain classified as essential services and hence are NOT affected particularly.
There is no significant change in status for APAC countries generally from previous updates. 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.

Due to reinstatement of movement restrictions, delays are expected with potential temporary closures possibly impacting operations for non-essential sectors.

Movement restrictions generally may cause some delays, albeit no significant impact to our operational status.

For India, there have been no significant operational updates. Restrictions have been extended till Sep 30 (in accordance to guidelines dubbed as ‘Unlock 4.0’). Please refer to our India website for detailed information via download.

For Greater China, no change in operational status.

Thailand restrictions extended to September 30. Malaysia’s RMCO restrictions are extended until Dec 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 

(Sep 29, 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 

(Sep 16, 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 Global Fairs & Events Service Center 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.

The next customer advisory will be the October 13 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.