Shippers brace for delays as coronavirus keeps China's factories closed

Container shippers should expect more blanked sailings and increased freight rates if China’s coronavirus outbreak extends factory closures, while airlines are scrambling to reduce flights into the country.

The government has already extended the lunar new year holiday until 2 February, but workers in major cities like Shanghai and Ningbo have been told to stay home until 10 February.

“Should this additional week-long shut down be extended nationally, it would be no small thing and would represent a tough-to-recover 2% hit to China’s GDP,” according to Freightos.

“Normally, ocean freight rates stay elevated and capacity remains tight in the short-term following Chinese New Year, as carriers accommodate both the backlog of shipments that didn’t get moved before the holiday and the new orders placed as the factories come back on line.

“Should the shutdown get extended by a week, the backlog would double, pushing freight rates up and lead to delays for many shippers.

“Limited trucking capacity could also cause some cancellations,” Freightos added. “This backlog could also motivate some time-sensitive importers to shift modes from ocean to air.”

Alphaliner said:  “Further blank sailings could be announced in anticipation of a slow recovery in cargo volumes.”

In a notice to customers, APL said there had been no significant impact to vessel schedules so far, and “other than Wuhan, all Chinese ports remain open.”

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Update from BDP International: Please note, most seaports are operational (with the exception of Wuhan), Government customs department officers are on duty but with limited resources, there are limited trucking services due to the lack of drivers available, and certain ocean carriers may have difficulty guaranteeing bookings to the region. Airlines are also announcing cancellations for flights to the region.