June 23, 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.
For the time being, 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 SummaryAir Freight
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 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.
(June 23, 2021) - The global airfreight market remains congested due to increasing volumes from ocean to air mode shift conversion. This development initially started Asia Outbound and has now impacted all major global trades as companies shift their supply chain planning to overcome supply shortage and low inventory levels. This also led to the situation that the inventory to sales ratio continues to decline which drives additional demand for airfreight across all major industries. This has also led in similar situations in the past to a continuous global airfreight demand and volumes. The recorded increases in volumes are also reflected in the G20 international merchandise and trade results that further develop positively in March 2021 in all regions. After a steep decline in crude oil and kerosine prices in the first half of 2020, both prices continue to increase in 2021 reaching months-on-months growth levels. The crude oil price is even forecasted from some major market players and parties to reach USD 100 / barrel in 2021 or 2022 due to increasing prices from OPEC members.
The passenger / freighter capacity ratio has remained on the same level since end of 2020 with only minor changes months-on-months. This also reflects that only minor changes have taken place in the international long-haul passenger market where only a limited number of flights has been recently added. The current forecasts to provide new updates that all major airlines expect increase in their international flight schedule, but the impact remains yet unknown. Especially the volume demand outbound US remains at peak market levels due to strong ocean to air mode shift with further expectation to increase in second half of 2021. Recently the market has pushed further market export growth from Europe and North America since Asia did record the largest growth in 2020 and start of 2021 remaining on high demand levels.
DB Schenker continues to expand the current own controlled network with additional ad-hoc flights supporting the tight capacity situation on key major trades. As the market remains congested especially on major trades, we are creating solutions that deliver additional stable capacity on major trade lanes for our customers in 2021 to support your business. Please reach out to your local DB Schenker teams and account managers to plan your volumes.
Our DB Schenker own controlled network includes flights on following routes:
→ Fueled with SAF: Frankfurt (FRA) – Shanghai (PVG) – Frankfurt (FRA)→ Chicago (RFD) – Munich (MUC) – Tokyo (NRT) – Seoul (ICN) – Munich (MUC) –Chicago (RFD)→ Chicago (ORD / RFD) – Seoul (ICN) – Shanghai (PVG) – Chicago (RFD)→ Munich (MUC) – Chennai (MAA) – Munich (MUC) – Chicago (RFD)→ Frankfurt (FRA) – Mumbai (BOM) – Frankfurt (FRA) – Atlanta (ATL) – Frankfurt (FRA)→ Frankfurt (FRA) – Chicago (ORD / RFD) – Frankfurt (FRA)→ Frankfurt (HHN) – Shanghai (PVG) – Frankfurt (HHN)→ Luxembourg (LUX) – Indianapolis (IND) – Luxembourg (LUX)→ Shanghai (PVG) – Singapore (SIN) – Sydney (SYD)→ Shanghai (PVG) – Luxembourg (LUX) – Shanghai (PVG)→ Frankfurt (FRA) – Beijing (PEK)→ Beijing (PEK) – Frankfurt (FRA)→ Frankfurt (FRA) – Shanghai (PVG)→ Shanghai (PVG) – Frankfurt (FRA)→ Shanghai (PVG) – Chicago (ORD)→ Frankfurt (FRA / HHN) – Zhengzhou (CGO)→ Zhengzhou (CGO) – Frankfurt (HHN)→ Zhengzhou (CGO) – Amsterdam (AMS)→ Hongkong (HKG) – Chicago (ORD)→ Hongkong (HKG) – Frankfurt (HHN)
More detailed information on this new flight schedule can be found by clicking here.
(June 23, 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.
(Jun 23, 2021) - There is no reported impact on operations due to COVID-19, with status largely remaining unchanged.
The situation in India continues its trending towards improvement with lowering rates of daily reported infections. Targeted lockdowns and emergency measures continue to be in effect as required. Malaysia extends nationwide lockdown till June 28. Taiwan extends COVID-19 restrictions until June 28. Other areas in the region such as Australia (NSW), Cambodia, Greater China (Southern cities e.g. Shenzhen, Dongguan, Guangzhou, and Taiwan) Indonesia, Japan, Myanmar, the Philippines, Thailand, Vietnam, continue to be closely monitored with calibrated & localized contingency measures being triggered 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.
(June 23, 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).
No operational restrictions for air cargo business
Angola, Bahrain, Egypt, Kenya, Namibia, Mozambique, Oman, Qatar, South Africa, Saudi Arabia, UAE
(June 23, 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. Strong demand is as well creating challenges on the export side straining resources. The USA TSA will be introducing new screening requirements starting June 30th: 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 & equipment in place that will provide an important advantage. But the additional TSA requirements whether with the forwarders or the carriers are expected to slow down transition of cargo and may require earlier delivery. DB Schenker will continue to closely monitors 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) gatewayis supporting our flight operations into the mid-west / Chicago area and providing an excellent alternative.
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 & Munich, as well as from Indianapolis to Luxembourg. They offer DB Schenker customers a stable & 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), that continues on to China (PVG). To India as part of its own controlled flight network there are connections options via our European Hubs to BOM and MAA.
USA – Asia (China Specific)
→ Strong market demand to Shanghai & 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 carriers’ schedules fluctuating and passenger flights continuing to be well below pre-COVID-19 levels. This situation is affecting all transit between North & South Am., as well as Central America.
→ 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.
(June 23, 20211) – The global market supply and demand graph for 2021 shows an increasing imbalance in favor of the demand.
The annualized market demand has been adjusted to some 7% while supply remains unchanged at about 3%. Idle capacity remains almost nonexistent and only few new buildings will come into the trades during remainder of the year with the majority already delivered into the trades. 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. The current back log is around 600,000 TEU, time to clear is estimated with at least a month. Half of the volume accounts for exports, the other half is a mix of laden and empty boxes for positioning. 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 will climb up further into July. The overall tight situation is expected to last throughout June and certainly Q3 / 2021, some trade report already a strong outlook until CNY 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).
(June 23, 2021) - All European Ocean Freight Branches are fully functioning operationally.
(Jun 23, 2021) - Notwithstanding the market situation as highlighted within Global Ocean Freight section, there are no significant COVID-19 impacted operations as status remains unchanged.
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 ripple effect from the ‘Ever Given - Suez Canal’ incident, as well as the Yantian port situation, continues to have a prolonged 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.
(June 23, 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).
(June 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.
(Jun 23, 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.
(June 23, 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.
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.
(June 23, 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.
However, 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 daysForecast transit time (CY-CY) westbound is 25+ days and eastbound 35+ 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.
Brest / Mala border heavily congested due to recent smuggling attempt leading to an estimated 7-day delay.
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.
(June 23, 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.
(June 23, 2021) -
→ USA: Fully operational.
→ Brazil: Market is running in normal conditions. Border between Brazil, Chile, Argentina and Paraguay working partially with many restrictions.
→ Mexico: 100% fully operational. Capacity shortages in Northbound lanes.
→ Canada: DB Schenker is fully operational. Non-essential Retail locations are now open in limited capacity, and that capacity will expand in July.
(June 23, 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 with dedicated guidelines and preventive measures, e.g. social distancing, wearing masks, temperature control, sanitizing stations 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!
(June 23, 2021) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.
(June 23, 2021) - There is no significant change in status for APAC countries generally from previous updates. The situation in India continues its trending towards improvement with lowering rates of daily reported infections. Targeted lockdowns and emergency measures continue to be in effect as required. Malaysia extends nationwide lockdown till June 28. Taiwan extends COVID-19 restrictions until June 28. Other areas in the region such as Australia (NSW), Cambodia, Greater China (Southern cities e.g: Shenzhen, Dongguan, Guangzhou, and Taiwan) Indonesia, Japan, Myanmar, the Philippines, Thailand, Vietnam, continue to be closely monitored with calibrated & localized contingency measures being triggered 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.
(June 23, 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.
(June 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 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 7 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.
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