DB Schenker Air Freight Intermodal Solutions Airplane Inside Loading

Customer Advisory COVID-19 Global Update

April 27, 2021

Please find here the newest 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, the alarming news from India painfully remind us that the pandemic continues to be around to impact businesses and lives.

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 Summary

Air Freight

  • Strong airfreight market demand continues throughout April as the market remains highly congested due to the transport mode shift from ocean to air due to supply chain delays and disruptions.
  • The capacity situation is increasingly demanding additional passenger freighter capacity due to the market demand increase and limited freighter capacity availability in the market as the pandemic continues.
  • Overall passenger capacity is still very low and has recently not increased but slightly decreased in the international long-haul sector due to lower passenger demand. Any increases are mainly caused by air cargo demand supporting global trade.
  • Especially demand from Europe and North America remains on a very high level in addition to the already strong demand situation that has been experienced from key economies in Asia Pacific throughout the last 15 months.

Ocean Freight

  • ​​​​​​​Missing sailings and in consequence missing repositioning of empty equipment in all main trades as ripple effect of the Suez blockage.
  • Severe non-availability of equipment and vessel space in Asia is visible for the remainder of April and May. Improvements for June are uncertain.
  • Volume pressure ex APAC to all destinations remains strong; to last at least until the end of Q2 / 2021. Volumes ex Europe soaring up, especially to the Americas, leading to increased rates.
  • Global carrier schedule reliability down to 40% and average delay of vessel arrivals of 6 days. Increased fuel cost will impact rates from Q2 / 2021 onwards.

Land Transport

  • Restrictions to contain the COVID-19 pandemic are established in several European countries, directly or indirectly affecting transportation.
  • 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

  • All operations and respective customer services remain stable, albeit we notice a volatile situation regarding governmental restrictions in the regions.
  • While continuously and closely monitoring the situation globally, we continue prioritizing protection of our staff and keeping our customers’ businesses running.
  • BCP’s and preventive measures are in place and monitored around the world.
  • We carry on supporting our customers on short notice with all conceivable warehousing services and available idle space.
  • To support COVID-19 vaccination, medical centers and respective treatments, we offer handling of medical devices and PPE worldwide, as part of our integrated end-to-end healthcare services.

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 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.

Based on these recent developments we do not expect major capacity challenges due to COVID-19 vaccine distribution in Q2 / 2021, but an increasing 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

(Apr 27, 2021) - The airfreight market is continuously demanding customers adapt and remain flexible as the imbalance of supply vs demand continues also throughout 2021. Considering recent strong increases in export demand from Europe and North America this has led to further impacts in the available capacity as airlines rather quickly adjust their flights and routings to support the demand on certain routes and trades. Most of the major airports recently recognized and shared record results in volumes. This is mostly caused by the strong demand for traffic rights of these large airports and connecting the major economies utilizing a more hub focused approach since the start of the pandemic due to major flight cancellations in the passenger market which led to a more decentralized approach in recent years due to large wide-body traffic also connecting additional airports. However, this also increases the risk and dependency on these airports as well as the congested infrastructure of many key airports requiring additional flights to utilized secondary airports to mitigate the dependency and ensure a smooth operation. Even though domestic air travel and demand in the US has recently improved the long-haul international passenger demand remains at very low level. An additional impact is caused by the immigration regulations and quarantine measures that severely impact the ease of international travel during the pandemic across various countries. An improvement is not expected before major countries have achieved a minimum immunization through COVID-19 vaccines which is not expected before end of 2021.

Passenger demand continuously remains on a low level and has not yet picked-up after the vaccination in major countries started. Therefore, it does remain critical to monitor the development of the rollout of the vaccination in the major economies to review a potential change in passenger traffic. However, this is also yet not forecasted to change in the short-term, but rather based on bilateral agreements between the economies and governments. Industry forecast outline that this could be expected by the end of 2021 and during the first half year of 2022 on selected trades, but not in general due to the vaccination rollout required globally.

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 tradelanes 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:


→ New from April 1 (fueled with SAF): Frankfurt (FRA) – Shanghai (PVG) – Frankfurt (FRA)
→ New from April 1: Shanghai (PVG) – Singapore (SIN) – Sydney (SYD)
→ 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) – Dubai (DWC) – 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) – 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)

Career Capacity Development 1-12/2020

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

  • Europe 

(Apr 27, 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. In some areas, our cross-border trucks might experience some minor delays.

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

  • Asia Pacific 

(Apr 27, 2021) - There is no reported impact on operations due to COVID-19, with status largely remaining unchanged.

The situation in India is being closely monitored, with strict lockdowns and emergency measures in effect. Some delays to operations will be expected. Other countries in the region with increasing trends of infection (such as the Philippines, Thailand, Japan) are also being closely monitored with contingency measures being triggered where necessary. 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 

(Apr 27, 2021) - Overall, the air freight operations in the countries remain uninterrupted and we continue to serve our customers. Only international passenger flights have been suspended in Saudi Arabia and Oman until further notice.

Situation

Country

No operational restrictions for air cargo business         

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

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

  • Americas 

(Apr 27, 2021) - Continued strain on capacity on most trade lanes as market demand grows but passenger aircraft cargo capacity remains slow returning to compensate. In addition, import terminals are at times running behind in transitioning cargo affecting transit times. DB Schenker closely monitors airport operations to best mitigate any impacts on our customers by keeping them informed. Regarding market capacity constraints, DB Schenker’s own controlled flight network, both transatlantic and transpacific, is providing secure capacity for our customers, and our airport-based offices are providing the necessary coordination to allow for the fastest release of cargo possible. Our Rockford (RFD) gateway is 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 and Munich, as well as from Indianapolis to Luxembourg. These flights 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 manageable on most trade lanes. Exception, and where capacity challenges remain are with movements to Australia, Singapore and India. DB Schenker has large block space agreements in place 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 via our European operations to BOM and MAA.

USA – Asia ( China Specific)

→ No capacity constraints for the most part to destinations in China. Exception being PVG. DB Schenker’s introduction of the own controlled flight network from ORD / RFD to PVG, two 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 America and South America as well as Central America.

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

USA / Latin Am to Middle East / Africa

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

  • Global

(Apr 27, 2021) - The global market supply and demand graph for 2021 shows an increasing imbalance in favor of the demand. Market demand is expected at around 9% while supply remains unchanged at about 3%. The Suez blockage has resulted into heavy equipment deficits due to missing vessel arrivals and thus delayed empty equipment positioning. Schedules in the main trades are disrupted and reflect a capacity reduction of up to 30 - 35% weekly, through slided sailings, port omissions and similar schedule recovery measures. The trades affected are Asia to Europe and vice versa, lesser impact in Asia to NORAM and Europe to NORAM. However, in all trades rates have been impacted through general rate increases, peak season adjustments / introductions and similar. This tight situation is expected to last throughout May and June; rates are expected to stay high. Carriers focus on FAK segments and neglect special agreements as much as possible.

Several main trades - in particular ex Asia - report a strong outlook until Golden Week (in Oct).

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

Schedule quality has been slightly improved during March to increase from globally 30 to 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 subject to continuous changes.

With an uncertain outlook on vessel utilizations 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) or via LCL.

  • Europe

(Apr 27, 2021) - All European Ocean Freight Branches are fully functioning operationally.

  • Asia Pacific 

(Apr 27, 2021) - Notwithstanding the market situation as highlighted within Global Ocean Freight section, there are no significant COVID-19 impacted operations as status remains unchanged.

The situation in India is being closely monitored with strict lockdowns and emergency measures in effect. Some delays to operations will be expected, Other countries in the region with increasing trends of infection (such as the Philippines, Thailand, Japan) are also being closely monitored with contingency measures being triggered where necessary. 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 ripple effect from the ‘Ever Given - Suez Canal’ incident is expected 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.

  • Middle East/Africa 

(Apr 27, 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.

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

  • Americas 

(Apr 27, 2021) - 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

(Apr 27, 2021) - Europe Land is fully operational and available for business, managing existing COVID-19 constraints in many 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 

(Apr 27, 2021) - General 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. Currently, DB Schenker Land Transport monitors and reacts especially 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 

(Apr 27, 2021) - Our Domestic Land product continues unabated to provide our regular high level of service. However, recent outbreaks in India have created delays due to a dwindling workforce and high transit restrictions between states and territories. The situation in India is rapidly deteriorating and this could lead to more 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. We are also still seeing the after-effects of the Suez Canal blockage and expect this to continue until the end of July. DB Schenker staff at Asia Landbridge border offices continues 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. A recent announcement from Savannakhét Provincial Governor mandates testing of Drivers crossing this area (at the Thai-Lao border). Therefore, additional costs are likely to be imposed on shipments traversing Savannakhét for the foreseeable future.

Our Domestic and International road 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 20 to 25 days and eastbound 22 to 28 days.

Table showing the Westbound ETD delay and border congestion delay risks

Westbound container stocks remain low and are contributing to delays.

Xi’an’s EB booking for sanitary goods & Shanxi Province deliveries may incur additional 5 days due to inspection.

Unfortunately, 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 

(Apr 27, 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

(Apr 27, 2021) -

→ USA: Fully operational.
→ Brazil: Market is running in normal conditions. Border between Brazil, Chile, Argentina and Paraguay working partially with many restrictions. Commercial activities are working part time, and must be closed during the weekends (restaurants, shopping centers, etc.)
→ Mexico: 100% fully operational.
→ Canada: We are fully operational. Lockdowns remain in effect in most provinces, with Ontario having all non-essential business shut down for 3 more weeks. This includes construction – only projects already underway could continue.

  • Global

(Apr 27, 2021) - Our operations and customer services remain stable. While continuously and closely monitoring the situation in all regions, we 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, 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 

(Apr 27, 2021) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.

  • Asia Pacific 

(Apr 27, 2021) - There is no significant change in status for APAC countries generally from previous updates. The situation in India is being closely monitored, with strict lockdowns and emergency measures in effect. Some delays to operations will be expected. Other countries in the region with increasing infection trends (such as the Philippines, Thailand, Japan) are also being closely monitored with contingency measures being triggered where necessary. 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.

Tight controls remain in all other APAC countries with varying measures calibrated to the respective local situations. We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.

→ For India, there have been no significant operational updates. 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 

(Apr 27, 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:

(Apr 13, 2021) - While observing COVID-19 infections across the region, 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. We are seeing increasing cases of COVID-19 in the USA and remain very robust in our safety measures and protocols.
→ Mexico: COVID-19 numbers are increasing in Mexico. Some states do require partial shutdowns of private life and economy in particular on weekends. We are doing everything possible to minimize the impact to our personnel and facilities.
→ Canada: Expanded lock down measures Province of Ontario and Quebec. 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 May 11 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

COVID-19 Customer Advisory Global Update – April 13, 2021

COVID-19 Customer Advisory Global Update – March 30, 2021

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.