COVID-19 Weekly Update 25/03/20

Dear Reader,

SILA Global is a member of Australia’s peak body group FTA. The below information is supported by our own contact with partners, please click on any highlighted comments for further information. Additionally we can advise:

Canada: No restrictions for shipping and logistics industry, however shipping space is tight, and air services very restricted by capacity. Pressure could mount on storage facilities, and container yards

Korea: No restrictions for shipping and logistics industry, however shipping space is tight, and air services very restricted by capacity

Taiwan: No restrictions for shipping and logistics industry, however shipping space is tight, and air services very restricted by capacity, all business unaffected at this stage.

Please contact your SILA Global representative for any special needs – communication is vital during this period.

“LOCKDOWN” what does it mean??

We would have all now seen the announcements from the Federal government and a range of states and territories that they have declared a “lockdown” and specified, particularly in relation to places of gathering, that they must be closed as well as noting requirements for people crossing borders. Of course the world cannot STOP and essential services will be required to operate so that the community can access food, petrol, pharmacies, medical facilities, etc.

Ports and Airports (more on that later) will continue to operate and the associated logistics chain will be required to support the clearance and movement of freight so supplies are maintained. Whilst Forwarders, Customs Brokers, Depots etc have not been specifically mentioned, Freight & Trade Alliance (FTA) have sought assurance from the respective states, territories and national government that they all form part of the logistics chain and will be seen as essential services.

China – Update
Our sources from China have provided us with the following updates

• The situation in China is much better now with new confirmed cases being mostly overseas travelers. There have been some non symptom infection cases identified as well as some who had been cleared only to be re tested as positive. However, the number of these types of patients are low and are being well managed.
• According to Chinese Government check points on roads have been reduced so most motorways/Highways are back to normal operation now. However, Hubei province still subject to regional restrictions

• All provinces are trying their best to get back to normal production level, including Hubei province. Hubei province has started to release people to other provinces, however most of the travelers are required to quarantine 14 days, before going back to the office or factory. The Government is planning to totally unlock Hubei province around April 8.

• Most of Provinces in China have announced they expect business and lifestyle back to normal in 2-3 weeks. Currently, the average of the productivity in China is back to above 70%, however that calculation includes Hubei province so in fact the average in other provinces is much higher (according to CCTV news).

• Maersk line and MSC have confirmed they are using MSC Mia to carry the empty containers from China to USA .

• According to Chinese Government, all the Chinese ports will not implement 14 days quarantine period for shipping vessels unless special concerns begin to be raised.

Europe Update
• Many European ports are still experiencing blank sailings and the very fluid dynamic of the situation at various land borders is having an impact on sea logistics businesses is becoming more noticeable. The lack of sailings from Asia has, as we have noted before, created an equipment imbalance, with high demand for exports from Europe not being able to access empty containers. Ports are operational albeit a slightly slower process than normal and cargo operators are able to work. As the situation develops in each country we will likely see, as we have in Australia, a range of new regulations and restrictions.

• South East Asia
As the situation expands various governments are instigating various levels of restrictions. In the Philippines, Luzon (Manila), Visayas (Cebu) and Mindanao (Davao) had been placed under a state of “enhanced community quarantine”. Obviously this will impact operations due to the restricted movement.

In Malaysia and India lockdowns have been announced and all non-essential manufacturing, government and private business premises in these countries are not operating. Essential services, as is the case in most countries, such as ports and logistics companies, continue to operate.

• New Zealand
New Zealand has announced a move to “level 4” lockdown for a period of 4 weeks commencing Wednesday March 25.

• Italy
We are advised that the Italian government has now enforced a lockdown from March 25 thru April 3 in an effort to contain the COVID 19 pandemic.
Ports and those involved in the food industry and transport (logistics) for essential services will not be impacted. All factories, we are advised, with the above exceptions have been told to complete all orders / shipments prior March 25 and then lockdown.

Impact on Shipping *Update* –
In response to the COVID-19 coronavirus outbreak, a number of countries, ports and organisations are publishing details of the measures being put in place. Please review the above link as required.

Economic Update

The coronavirus continues to spiral out of control, as the global epidemic spreads with New York cases accelerating, as it looks like Europe may be peaking. The plan was to ‘flatten the curve’, so the emergency health services can cope, thus feeding those infected into spare capacity over a longer period

Markets await US legislators and closely monitor the explosion of new cases in the US. The tsunami is rolling towards us and time will tell how effective the Governments actions are.

See the full update HERE

Shipping / Depot Updates
• Containerchain Extends Payment Terms During COVID-19 Crisis – CTAA negotiated a payment terms extension to 21 days by Containerchain to assist with landside transport cash-flow concerns due to the COVID-19 crisis. – see full article HERE
• Container staging – whilst we may have concern about office closures there is also the real possibility that importer warehouses / 3PL facilities may also face a shutdown. In this situation transport operators may be faced with collecting containers and staging prior to delivery when a facility re-opens. Do transport companies have sufficient hard stand space to handle this and still run their operation efficiently?
If you have hardstand space available to assist in such circumstances please let us know so we can keep members updated.

Airfreight update
As referenced in our last weekly update the global airfreight capacity has been decimated by the grounding of a large percentage of passenger aircraft. Whilst we still have charter aircraft and dedicated freighters these alone will not accommodate all the required movement of cargo.

Whilst many larger businesses have managed to secure arrangements for charters or use of passenger aircraft as cargo flights there are many SMEs out their that do not have the volume to justify such an outlay.

To that end FTA now has a service to support other forwarders who are also contemplating chartering aircraft but may not have the necessary volume requirements to be commercially viable.

The solution is simple in the form of bulletin board titled “COVID-19 Air Cargo Bulletin Board” whereby industry can communicate with each other to advise freight space availability or requirements refer HERE.

As a contribution to Australian trade and community, FTA will host this service as long as required on a free of charge basis available to all of industry.

Risk Management

From James Cotis – Principal, at Logical Insurance Brokers –
“Participants within the logistics industry may hold Business Interruption (BI) cover as part of their overall insurance program. BI cover (if selected) is usually included within standard Business Insurance & Industrial Special Risks (ISR) policies.
Many BI policies will typically include clauses relating to cover provided for “Human Infectious or Contagious Diseases”, with certain sub-limits applying. Although the actual wording of these clauses will differ from insurer to insurer, many will be similar to:” – click HERE to see the full article from Logical Insurance Brokers

Business Operations

1. Economic Response to the Coronavirus
The Federal Government. on Sunday March 22, announced a second stage of measures providing assistance to businesses with a turnover less than $50 million* in the form

(a)Wage Subsidy
The Government is giving eligible businesses a cash payment of up to $100,000 for the period March 2020 to September 2020. That payment will be worth 100% of the tax those small and medium businesses are withholding from their employees salary and wages.

(b)Guarantee on Loans
A new Coronavirus SME Guarantee Scheme was announced to support eligible businesses with loans to be used for working capital purposes granted within 6 months starting 1 April 2020
NB: please see note below re free webinar on this and more Today at midday AEDT

2.Quick links to government support for businesses and households
impacted by COVID-19 – an update from Senator the Hon Michaelia Cash
The Government is acting to cushion the blow from the coronavirus for businesses and households to help them get through to the other side of the crisis as the world deals with the significant challenges posed by its spread
Below I have set out the quick links to the measures available to small and medium businesses, sole traders and households under the $189 billion economic support package announced by the Prime Minister: see article HERE

3.”Lockdown” advice from the Australian Government
On Sunday night (March 22), the National Cabinet agreed to move to more widespread restrictions on social gatherings, to be reviewed on a monthly basis. The measures are expected to be in place for at least 6 months. The statement by the Prime Minister following the National Cabinet meeting can be found: HERE

Russell Wiese and David Thompson of Hunt & Hunt Lawyers last week delivered a webinar to in excess of 300 registered members on the supply chain – commercial and employment law issues arising due to the impact of the Coronavirus – a PDF copy of slides and access to the recording is available HERE.

Phil O’Toole, Managing Director of Centium will TODAY (12pm AEDT 25 March 2020) present a webinar outlining the Federal and State Governments Business Support Measures designed to assist your business during these uncertain times with the Coronavirus within our shores – register NOW HERE – a recording will be made available if you cannot attend

Workplace Relations

Ed Mallett, Founder & Managing Director – Employsure, conducted a live stream last week to address ” What’s next for employers?” – Ed addressed;
• Help your business navigate COVID-19
• Prepare for an uncertain future
There are also links to a range of support material on their website – see full recording HERE

Please note the below links for up dated information
• Latest Shipping notifications
• Loadstar web site – broad coverage of a range of related issues globally
• ABF update on advice to commercial vessels – March 20
• CCIWA – COVID-19 response website
• WCO: COVID-19 Urgent Notice: counterfeit medical supplies and introduction of export controls on personal protective equipment
• New Updates from Department of Health
• Last week, the World Customs Organization (WCO) announced they had published a dedicated web page “to update Members and the general public about WCO’s tools, instruments, recommendations, as well as an HS Classification reference document for COVID-19 medical supplies among others. Remember that regulators and masks that are intended for medical purposes or make medical claims may be regulated by TGA in Australia and similar authorities in other countries such as the FDA in USA.

Business Continuity Plans (BCP)
Please see below responses from government agencies and terminal operators as to their processes to manage full shutdowns of part or all of their facilities. The lists can be found HERE

We will continue to liaise with these organisations and provide updates as they are received, as well we suggest you monitor their respective websites

NB: In case you missed it FTA now have all coronavirus (COVID-19) updates on one page on the website for you convenience – please see HERE

FTA suggest members / industry maintain close relations with their forwarders, agents, shipping lines, clients and suppliers / agents globally to ensure they have the latest information available. This is a time for review and planning not for panic.

FTA will continue to monitor issues surrounding the coronavirus and keep members updated as necessary.

Stay Well and Stay Healthy

John Park – Head of Business Operations, FTA / APSA