CORONAVIRUS - UPDATE / SOME INTERESTING INSIGHTS FROM CHINA

China - landslide updates 

Our sources from China have provided us with the following updates

• Currently, the increase in the number of confirmed infected patients in China is less than 100 cases per day (95% new cases are in Wuhan) with many provinces showing zero increase. Over half of the provinces have dropped their emergency management level to Level 3.
• Details from Chinese Customs confirmed, Exports from China for the first two months (Jan & Feb) reduced 17.2% to USD$292.45 billion. 
• According to local newspapers major East production provinces and South production provinces are back to normal work. News sources also advise that currently major companies and manufacturers have a back to work rate at 90%, however smaller business are not at that same level
• According to a Chinese government announcement (March 3, 2020), Prime Minister Mr. Keqiang Li has announced all the ports need to reduce their charges to assist with recovery.
• In some key ports, such as Shanghai, Guangzhou, Beijing etc, the import and export declaration process has been simplified to facility cargo movement and recovery.

It is apparent the Chinese government is continuing to stimulate recovery across many facets of the manufacturing and trading communities to ensure a full return to economic stability as quickly as possible. 

Business Continuity Plans (BCP)
In recent days we have had calls from clients as regards BCPs for both Government agencies and Terminals should the coronaviurs get to a stage where a full shutdown of these services may be required. Our initial response has been as below, however we have reached out to these organisations and will provide formal commentary from them once received.

Government Agencies
Both the Australian Border Force (ABF) and Department of Agriculture, Water and the Environment (AWE) currently have a geographically dispersed workforce so any major shutdown in one area could be offset by processing in another. 

Terminals  
As we have seen in the past terminals have, were possible, sub-contracted vessels to another terminal operator. Whilst we have no official word as yet from terminal owners we would expect similar arrangements could be put in place should coronavirus impact a terminal to a degree of full shutdown. 

Economic Update

The shut down of the industrial Northern Italy is a shock to European markets, as the impact of the coronavirus spreads, hitting the existing supply chain.
The Oil Price bomb, combined with fears over the impact of the coronavirus, are wreaking havoc on markets. The huge falls in stocks and asset prices are a shock but the sun rises every morning.

Shipping Updates
Loch M. Fraser have been in touch with a number of the major lines / consortia and their views are summarised below

• have been seeing improvement in bookings / vessel loads and would expect to see a return to full sailing schedules by end of March / early April 
• trucking capacity in the Northern and Southern ports back at 100% so freight is moving 
• expect full sailing schedules by week 12/13 and loads at 90-95% capacity
• vessels that have been offline have been used as storage depots for "reefers" due to the reefer plug shortage at Chinese ports - these will now slowly start to be discharged at their destination ports
• due to lack of container movements during the blank sailing period we could see a shortage of equipment at origin ports around the world. This may impact exports especially in the fresh produce field. 
• strong northbound trade - southbound starting to improve

Media - The ABC in their "The Business" broadcast on Monday March 9, addressed the Shipping Slowdown with interviews of Neil Chambers (CTAA) and Alison Cusack (Cusack & Co, Maritime Lawyers).

Workplace Relations
Over the last couple of weeks Loch M. has received a lot of calls from clients about the coronavirus and how the ongoing outbreak of the potentially fatal infectious disease may impact their business. We have reached out to our HR partners Employsure and they have provided the document below to assist members. 

Coronavirus guide for business owners. 

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 5
• ABF update update on advice to cruise industry - March 5  
• New Updates from Department of Health 

 
FURTHER INFORMATION
We suggest clients maintain close relations with their agents, shipping lines, suppliers / agents in China to ensure they have the latest information available. This is a time for review and planning not for panic.

Loch M. will continue to monitor issues surrounding the coronavirus and keep clients updated as necessary.