April 22, 2020

The economic consequences of the Covid-19 outbreak are already impacting economies with devastating speed and severity.

Earlier this week, the West Texas Intermediate, the American oil benchmark fell into negative values for the first time ever, dropping as low as –USD 37.63 per barrel.

However, the Coronavirus induced lockdowns across the world has not dried up the demand for oil only. The scale of this drop in demand is largely influenced by the aviation sector which has been paralysed by the pandemic. 

More than 60% of the world’s commercial aircraft have been grounded due to daily international flights plummeted by 87% since January 2020.

With such troubling challenges for supply chains worldwide, please find below an update of the situation in the territories we are present and some power trade lanes:

Mauritius

In an unprecedented development which has sent shock waves all across the country today, the board of Air Mauritius has decided to place the company under voluntary administration – in order to safeguard the interest of the airline and that of all its stakeholders. More details on the impact of such a decision will be communicated shortly.

On the sea freight side, in an objective to minimise yard inventory at the terminal, the Cargo Handling Corporation Ltd has communicated that as from Friday 24, April 2020, the cut off time for gating in of export containers will be reduced from 24 hours to 08 hours only, prior to berthing of vessels.

As a reminder, it is to be pointed out that we have upcoming cargo flights on April 24, 2020 by both Alitalia (FCO-MRU-FCO) and Air Seychelles (SEZ-MRU-SEZ). While the Alitalia flight has connection possibilities to other European destinations, the Air Seychelles flight will have transhipment flows to JNB, DXB and BOM.

France

There has been no major change on the logistics side. The lockdown remains enforced until May 11, 2020.

It has been reported that the current capacity for freight is much constrained with 80-90% of passenger flights being cancelled during the lockdown period, resulting in an equal decrease percentage to freight space.

With such suspensions, there has been a higher-than-usual number of chartered cargo flights.

India

Given that many companies are not being able to operate during the national lockdown, it has been reported that many CFS’s are running at full capacity due to no movement of cargo. Moreover, the terminals across India are facing severe labour shortages and high yard inventories, impacting productivity. Our team has also shared that berth schedules are being disrupted in most of those terminals, with ongoing blank sailings.

To get specific updates on the various regions in India, read the Velogic India Customer Advisory by clicking here.

Kenya

Besides the prevailing Coronavirus outbreak situation, The Kenyan Meteorological Department has issued a nationwide heavy rain advisory yesterday – with high levels of rainfall possibility for the western and central regions, including the Nairobi area.

Large waves and strong winds may cause storm surge along the coast, possibly affecting maritime operations. Disruptions in commercial transportation are to be expected, until April 25, 2020.

Madagascar

As part of the containment measures in Madagascar, the curfew is still maintained. However, Toamasina port is now working until 05:30 pm only, while it used to continue operations until late night. 

With such measures, there are longer queues at the port gates, especially for gating in of containers at export, with an average waiting time of 09 hours – thus leading to a risk of breaching the cut-off time, hence missing vessels.

Bangladesh

The ongoing nationwide closure is being extended until May 05, 2020. However, the government is planning to allow the re-opening of some export-oriented industries on a limited scale.

The National Board of Revenue (NBR) has resumed full-fledged customs operation in Chittagong port to mitigate the risk of potential congestion. The customs wing has issued an order on Wednesday in this connection.

Earlier, the customs suspended assessment and release of commercial goods from the port due to the lockdown. However, as from today all importers will be able to release goods from ports.

Chittagong seaport is operational – with the waiting time for berth reaching 15 days on average. It has been shared that 38 container vessels are waiting for berth at outer anchorage. CFS’s are operational – but with reduced workforce until 06:00 pm daily.

Supplementary Information

Australia: Our partner in Australia has reported that airfreight is the biggest challenge in the market for the moment. The rates quoted by airlines are changing on a daily basis while spaces are quickly booked out.

Please do not hesitate to liaise with your usual contact person at Velogic, should you have any queries regarding this announcement.