DB Schenker Air Freight Intermodal Solutions Airplane Inside Loading

Customer Advisory COVID-19 Global Update

July 7, 2021

Please find here the latest edition of our COVID-19 global customer advisory update. Thanks to growing vaccination coverage and decreasing pandemic impact, parts of the world are heading towards more regular conditions of business. However, with the spread of new mutations we do also see countries and regions hit by new waves of outbreak causing continuous impact on lives and business.

While improving, the conditions under which we all operate will continue to be disruptive and far from normal. We look forward to continue our update services as long as the global pandemic influences the economy, hence our common business.

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.

Executive Summary

Air Freight

  • Overall airfreight market demand is still rising as supply chain disruptions continue in July 2021.
  • Second half as well as peak season are expected to be a capacity crunch where it will be most crucial to have access to capacity.
  • Passenger market is not improving on a global level and no upside expected for second half of 2021.
  • Especially ex North America demand situation is reaching peak levels with major supply disruptions caused by the global ocean freight market situation.

Ocean Freight

  • Missing sailings and in consequence missing repositioning of empty equipment in all main trades resulting as a ripple effect of the Suez blockage, and more recently of the port situation in Yantian. Both impact the available allocation across all carriers as well as the equipment availability for the remainder of the third quarter.
  • Volume pressure ex APAC to all destinations remains strong; to last at least until the end of Q3 / 2021. Volumes ex Europe remain strong as well, especially to the Americas, market rates in all main trades have climbed further upwards.
  • Global carrier schedule reliability down to 38% and average delay of vessel arrivals of 6 to 7 days.

Land Transport

  • Some restrictions to contain the COVID-19 pandemic are still established in several European countries, directly or indirectly affecting transportation. Nevertheless, we see a trend towards more and more relieving of restrictions throughout Europe.
  • In case of disruptions, we follow our pre-defined contingency plans to ensure flows of cargo. We are adapting our transport service offerings daily to the needs of our customers.
  • Some receivers continue to have limited operations. All shippers may check the delivery possibility with the consignee to avoid cost for storage or return shipments.

Contract Logistics

  • Situation globally remains volatile, especially in APAC region with different governmental restrictions.
  • Our operations and respective customer services though remain stable.
  • No change in prioritizing protection of our staff and keeping our customers’ businesses running with respective BCP’s and preventive measures in place and being controlled around the world.
  • We carry on supporting our customers on short notice with all conceivable warehousing services and offer available idle space, hence please check with your DB Schenker account manager or local contact person.
  • To support COVID-19 vaccination, medical centers, respective treatments and preventive measures, we offer handling of medical devices and PPE worldwide, as part of our integrated end-to-end healthcare services.

Fairs, Events and Special Logistics

  • Situation globally remains volatile with different restrictions in most countries.
  • Leading trade fair markets worldwide are open or partially open.
  • First sport events are taking place again (e.g. UEFA Euro) and others are scheduled with a strong involvement of our Global Event Specialists.
  • Our teams worldwide are in close contact with trade fair and event organizers as well as the respective associations and authorities and able to advise you on the current situation and provide the required services.
  • For further information or questions, please contact us under dbschenkerfairs@dbschenker.com.

Global Market Updates

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

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

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

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

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

  • Global

(Jul 06, 2021) - The global airfreight market demand is remaining very strong and in certain regions reaching peak levels compared to recent years as major supply chain disruptions lead to a continuous large mode shift from ocean to air. This high demand situation in the global airfreight market with still largely existing global passenger flight cancellations does lead to a congested market which is not expected to change significantly during the second half of 2021. Industry forecasts are projecting a high market demand for airfreight in remaining months of 2021 and 2022 due to a strong economic situation in major economies and countries. This is critical as the passenger market remains largely impacted by the COVID-19 pandemic and is not expected to return before 2023 with significant improvements in 2024 and 2025.

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

→  New from July 2: Hongkong (HKG) - Los Angeles (LAX)

→  Fueled with SAF: Frankfurt (FRA) – Shanghai (PVG) – Frankfurt (FRA)

→  Beijing (PEK) – Frankfurt (FRA)

→  Chicago (RFD) – Munich (MUC) – Tokyo (NRT) – Seoul (ICN) – Munich (MUC) – Chicago (RFD)

→  Chicago (ORD / RFD) – Seoul (ICN) – Shanghai (PVG) – Chicago (RFD)

→  Frankfurt (FRA) – Beijing (PEK)

→  Frankfurt (FRA) – Mumbai (BOM) – Frankfurt (FRA) – Atlanta (ATL) – Frankfurt (FRA)

→  Frankfurt (FRA) – Chicago (ORD/RFD) – Frankfurt (FRA)

→  Frankfurt (FRA) – Shanghai (PVG)

→  Frankfurt (HHN) – Shanghai (PVG) – Frankfurt (HHN)

→  Frankfurt (FRA / HHN) – Zhengzhou (CGO)

→  Hongkong (HKG) – Chicago (ORD)

→  Hongkong (HKG) – Frankfurt (HHN)

→  Luxembourg (LUX) – Indianapolis (IND) – Luxembourg (LUX)

→  Munich (MUC) – Chennai (MAA) – Munich (MUC) – Chicago (RFD)

→  Shanghai (PVG) – Chicago (ORD)

→  Shanghai (PVG) – Frankfurt (FRA)

→  Shanghai (PVG) – Luxembourg (LUX) – Shanghai (PVG)

→  Shanghai (PVG) – Singapore (SIN) – Sydney (SYD)

→  Zhengzhou (CGO) – Frankfurt (HHN)

→  Zhengzhou (CGO) – Amsterdam (AMS)

Career Capacity Development 1-12/2020

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

  • Europe 

(Jul 06, 2021) - All offices remain in full operation with access to terminal handling and ground transportation. All our European hubs deliver import and receive export freight with no backlogs recorded towards the weekend. Operationally, our linehauls to and from the hubs are running as scheduled.

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

  • Asia Pacific 

(Jul 06, 2021) - There is no reported impact on operations due to COVID-19, with status largely remaining unchanged.

We continue to closely monitor the situation in markets that are trending unfavorably with infection rates such as Malaysia, Indonesia, Thailand, Myanmar, Bangladesh, Vietnam, Australia (NSW) and China Southern border areas, where targeted lockdowns and emergency measures continue to be in effect as required. All other APAC markets continue to be on the radar, such as Japan, where the upcoming Olympic Games coupled with calibrated & localized contingency pandemic control measures are being planned where necessary. Some delays may be expected. Our priority is still focused on the health and safety of our workforce, while mitigating the operational impact where feasible. This underscores the continued risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation.

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

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

  • Middle East/Africa 

(Jul 06, 2021) - Overall, DB Schenker’s air freight operations in the countries remain uninterrupted and we continue to serve our customers. For more detailed market updates related to Middle East and Africa, please click here (PDF).

Situation

Country

No operational restrictions for air cargo business         

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

  • Americas 

(Jul 05, 2021) - Continued strain on capacity on most trade lanes with market demand continuing to rise and widebody passenger aircraft cargo capacity slow in returning to compensate. USA airport terminals continue to run behind processing and transitioning import cargo affecting their immediate availability on arrival, but the situation is improving for the transition of import shipments. For exports, strong market demand is creating challenges as well. The USA TSA has introduced additional security screening requirements that started June 30. All cargo moving on cargo aircraft will require security screening similar to what currently done for movements on passenger aircraft. Key DB Schenker facilities have well established TSA screening processes and equipment in place that will provide an important advantage. But the additional IACO / TSA requirements, whether with the forwarders or the carriers, are expected to slow down the transition of cargo. The initial weeks of July may well see transit delays. DB Schenker will continue to closely monitor airport operations to mitigate impacts to our customers, keeping them informed and mitigating any delays.

With continued volatility in available capacity in the market and challenges at the airport terminals, DB Schenker’s own controlled flight network both transatlantic and transpacific is providing secure space for our customers. Our airport-based offices are providing the necessary coordination to provide the fastest transition of cargo possible. Our Rockford (RFD) gateway is supporting our flight operations into the Midwest / Chicago area and providing an excellent alternative. DB Schenker is now in a newly constructed facility ‘ramp’ side to the aircraft with 30,000 sqft (2.800 m2) of warehouse space.

Americas exports by trade-lane:

USA – Europe

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

USA – Asia (excluding China)

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

USA – Asia (China-specific)

→ Strong demand to Shanghai and Hong Kong. DB Schenker, as part of its own controlled flight network, maintains 747 freighter flights from ORD / RFD to PVG, 2 times per week, providing a secure option to that market and surrounding cities.

USA – Latin Am / Latin Am to Europe and APAC

→ Intra-Americas: Capacity is in strong demand with challenges related to freighter carrier schedules fluctuating and passenger flights continuing to be well below pre-COVID-19 levels.

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

USA / Latin Am to Middle East / Africa

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

  • Global

(Jul 06, 2021) - The global trade remains very strong, this is valid in particular for all trades ex and within Asia Pacific. All trades are expected to grow positively during 2021.

Forecasted container trade growth Graphic

Idle capacity remains almost nonexistent (currently at 0.9%) and 2 / 3 of the capacity to be released within 2021 has been phased into the trades already. Overall, the supply side remains limited to some 3% which leaves a huge delta between market supply and market demand and thus leads to a high-rate environment. After having dealt with the ripples of the Suez blockage, the situation around the COVID-19 cases in Yantian adds up to the trades and tightens the bottleneck on equipment. Schedules in the main trades remain disrupted and reflect a capacity reduction of up to 25 - 30% weekly, through slid sailings, port omissions and other schedule recovery measures. The trades affected most are Asia to Europe and vice versa, but also ex Asia to NORAM and Europe to NORAM.

However, the space decline is followed by significant general market rate increases, peak season adjustments / introductions and similar. All main trades continue to show record rate levels, several trades have climbed further up and appear to reach their peak level during the current month of July while excellent utilizations of the vessels expected to last at least until Golden Week in October, some trades report already a strong outlook until LNY in 2022.

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

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

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

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

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

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

Our experts in Ocean will support and guide for

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

  • Europe

(Jul 06, 2021) - All European Ocean Freight Branches are fully functioning operationally.

  • Asia Pacific 

(Jul 06, 2021) - Notwithstanding the market situation as highlighted within Global Ocean Freight section, there are no significant COVID-19 impacted operations as status remains unchanged.

We continue to closely monitor the situation in markets that are trending unfavorably with infection rates such as Malaysia, Indonesia, Thailand, Myanmar, Bangladesh, Vietnam, Australia (NSW) and China Southern border areas, where targeted lockdowns and emergency measures continue to be in effect as required. All other APAC markets continue to be on the radar, such as Japan, where the upcoming Olympic Games coupled with calibrated and localized contingency pandemic control measures are being planned where necessary. Some delays may be expected. Our priority is still focused on the health and safety of our workforce, while mitigating the operational impact where feasible. This underscores the continued risk on operations and the vigilance necessary to cope with the ever- present COVID-19 situation.

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

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

  • Middle East/Africa 

(Jul 06, 2021) - DB Schenker is fully operational and available to manage the current demand from customers even though an equipment shortage has been seen in the region. For more detailed market updates related to Middle East and Africa, please click here (PDF).

  • Americas 

(Jun 23, 2021) - A lot of pressure especially ex South America for all outbound trades: Tight equipment, in particular on the East Coast of South America, overly full ships, therefore services are closed for new bookings in the month of May. Pressure on allocation and equipment availability will continue. Increased market demand for main commodities will continue, depending on the rate exchange which so far is looming a positive trend for exports in coming months. Spot market rate levels expected to continue to increase in the month of June.

  • Global

(Jul 06, 2021) - Europe Land is fully operational and available for business, managing existing COVID-19 constraints in European countries. Asia gives a heterogeneous picture with most countries fully operational and available for business while a few countries (such as India) are facing challenges, however operating. Asia Landbridge (China to South-East Asia) as well as Eurasia Landbridge (China – Europe Train) are fully operating, although facing congestions. Land operations in the Americas are also showing constraints, but still working close to normal.

  • Europe 

(Jul 06, 2021) - Some restrictions to contain the COVID-19 pandemic are continuing to be in place in several European countries and are in parts directly or indirectly affecting the transportation of goods. Nevertheless, we see a trend towards more and more relieving of restrictions throughout Europe. DB Schenker Land Transport monitors the situation closely and reacts specially to border situations due to regulations imposed by individual countries. For any potential cases of disruptive conditions, we follow our pre-defined contingency plans to ensure flows of cargo as much as possible. In addition, we are adapting our transport service offerings daily to the needs of our customers.

Europe Land Transport Heatmap Graphic

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

  • Asia Pacific 

(Jul 06, 2021) - Our Domestic Land product continues unabated to provide our regular high level of service. The situation in Malaysia, Thailand and other APAC countries is being monitored closely as the local situations could lead to delays.

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

Border Gateway observations

Border congestion due to high market demand may add between 1 and 3 days to Asia Landbridge. A global demand for containers due to Ocean and Air capacity constraints continues to put significant pressure on road assets across the region. DB Schenker staff at Asia Landbridge border offices continue to ensure lead-times are minimized and service levels maintained through “triage” prioritization. Additional labor and associated domicile costs are still required to strategically avoid lengthy quarantine periods for our international drivers. Our Domestic and International Land services continue to meet the high market demand and are strategically positioned to meet the forecast demand spike associated with ongoing reduced Ocean freight and Airfreight capacity. However, Customers are strongly urged to coordinate any volume spikes with their DB Schenker Account Manager as early as possible.

Congestion levels continue to fluctuate on our Eurasia service for Rail and Road. Please refer to table 1.

Low < 3 days, Medium > 3 days, High > 5 days, Extreme > 7 days

Forecast transit time (CY - CY) westbound is 25+ days and eastbound 35+ days

Table showing the Westbound ETD delay and border congestion delay risks

CN / KZ, CN / MN, CN / RU congestion up to 7 days

Brest  /Mala congestion range 3 - 7 days

Westbound container stocks remain low and are contributing to delays.

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

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

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

  • Middle East/Africa 

(Jul 06, 2021) - Land transportation may be delayed in some countries due to additional checking. In some parts of the GCC, cargo movement has been restricted to food and essential items.

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

  • Americas

(Jul 06, 2021)

→  USA: Fully operational.
→  Brazil: Market is running in normal conditions. Border between Brazil, Chile, Argentina and Paraguay working partially with many restrictions.
→  Argentina: Due to current situation some operations delays on customs border may occur on international shipments, due to the requirements by government that drivers must have a covid test "PCR" once they arrive and can not get into the country until it is negative.
→  Mexico: 100% fully operational. Capacity shortages in Northbound lanes.
→  Canada: DB Schenker is fully operational.

  • Global

(Jul 06, 2021) - While noticing different governmental restrictions especially in the APAC region, our operations and customer services remain stable worldwide. We continue monitoring the situation in all regions very closely and persist in prioritizing the protection of our staff and keeping our customers’ businesses running. Therefore, we focus on dedicated guidelines and preventive measures, e.g. social distancing, wearing masks, temperature control, sanitizing stations, enhanced cleaning on site, having office-based staff working remotely and respective controlling of health and safety regulations.

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

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

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

  • Europe

(Jul 06, 2021) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.

  • Asia Pacific

(Jul 06, 2021) - There is no significant change in status for APAC countries generally from previous updates. We continue to closely monitor the situation in markets that are trending unfavorably with infection rates such as Malaysia, Indonesia, Thailand, Myanmar, Bangladesh, Vietnam, Australia (NSW) and China Southern border areas, where targeted lockdowns and emergency measures continue to be in effect as required. All other APAC markets continue to be on the radar, such as Japan, where the upcoming Olympic Games coupled with calibrated and localized contingency pandemic control measures are being planned where necessary. Some delays may be expected. Our priority is still focused on the health and safety of our workforce, while mitigating the operational impact where feasible. This underscores the continued risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation.

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

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

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

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

  • Middle East/Africa 

(Jul 06, 2021) - All DB Schenker contract logistics facilities in MEA are operational as per the appropriate health and safety standards and other regulations levied by the local government.

  • Americas

(Jun 23, 2021) - Our warehouses continue to operate with precautionary measures in place for the health of our people and hence keeping up our customer services.

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

DB Schenker Organizational Update

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

The next customer advisory will be the July 21 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.