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Impact on Shipping during COVID-19

Apr 30, 2020

The Logistics and Trade Industry has seen significant disruption since the outbreak of COVID-19, as the reliance on online shopping and delivery has increased.

Initially disruptions were seen out of China, which quickly extended to World Wide as the pandemic spread across the globe. All modes of transport (land, sea and air), have been significantly disrupted, as a number of countries have a lockdown in place on imports and exports for the foreseeable future.

Demand for food, some household goods and essential medical supplies has soared. However the rush for that business is nowhere close to making up for the lost freight volumes from shutdowns of manufacturing and retail sales.

So how is it effecting modes of transport?

Sea shipments are experiencing vessel deviations, forced discharges, blanked (cancelled) or slowed sailings on virtually all trade routes. Some routes have ceased completely due to port or country lock-downs.

Shipping containers are also in short supply as they clog ships, ports, warehouses and container yards. Container ports around the globe are starting to or have exceeded their capacity.

Air freight shipments have been greatly impacted due to the shutdown of passenger aircraft movements across the globe. Charter flights and specialist freight aircrafts are being utilised for the most urgent and medical equipment movements, however at an increased cost.

There is an on-flow effect then on Road freight, for example goods that are stuck in Sydney may be transported to Brisbane now via trucks instead of other methods (sea/air).

A closer look at “risk”:

It is vital from a Risk Management perspective to keep up to date with trade and jurisdictional actions being implemented to prevent the spread of COVID-19.

Freight Forwarders, Customs Brokers and other companies dealing with importing/exporting goods need to be mindful of their contractual obligations and the heightened risks when shipping goods in the current climate. Things such as trade routes, if the trade chain will remain viable for the period of the intended voyage, the risk of demurrage or extra storage costs, the inability to access or collect cargo due to COVID-19 impacts, the possibility of business failure, possible trade disputes, potential payment delays/defaults, a potential increase in fraud/theft, and the risk of temperature or time sensitive goods being greatly impacted.

It is also recommended that all parties moving cargo (inland or overseas), need to remain up to date on shipment and carrier details. Situations and circumstances can change quickly without notice and can present issues at any stage during the transportation of goods.

Please note this information is general in nature and does not take into consideration your personal circumstances or needs. Contact Austbrokers Comsure on  1800 122 194 for advice.

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