Impact of NCP epidemic on foreign trade and port and shipping logistics

The outbreak of the NCP epidemic will have a great impact on the foreign trade and port and shipping logistics industry. The big shopkeeper will cooperate with the suppliers of the platform to sort out this report for the reference of people from all walks of life in the industry and the competent government departments.

I. Impact on Port and Shipping Enterprises

1. Impact on international trade

According to the latest forecast report released by IHS Markit, a well-known research institution in the United States, the impact of the new crown epidemic on the global economy will be more severe than the SARS epidemic in 2003. The report predicts that the long-term economic impact of the new crown virus outbreak will depend on Chinese government control measures. If the current unprecedented prevention and control measures adopted by the Chinese government persist until the end of February and gradually be liberalized from the beginning of March, the resulting economic impact will be concentrated in the first half of 2020, and the real global GDP will be reduced by 0.8% in the first quarter. In the second quarter, it will decrease by 0.5%. In this situation, the new crown epidemic and related measures will reduce global GDP by 0.4% throughout 2020. IHS Markit also predicts that the lifting of prevention and control measures in 2021 will release previously suppressed demand, which is expected to increase global real GDP by 0.4%.

2, the impact on the transportation industry

Alphaliner pointed out in a report in early February that the areas affected by the new crown epidemic accounted for more than 80% of China’s GDP and accounted for more than 90% of exports. Contingency measures to extend the Chinese New Year holiday will reduce the container freight volume of Chinese ports (including Hong Kong) by 6 million TEU in the first quarter of 2020. It is expected that the growth rate of global container throughput this year will drop at least 0.7%.

At the same time, the BDI of the shipping index, represented by the international dry bulk freight index, has recently fallen off a cliff. The Capesize Freight Index (BCI), one of the three major component indexes of BDI, has unprecedentedly entered the negative range of “operation”. The outbreak of the New Crown virus epidemic is a core factor that has impacted the shipping market of bulk carriers, which severely hit the demand for basic dry bulk cargoes such as coal and iron ore, and then affected domestic industrial production, regardless of GDP or foreign trade exports. Will bring adverse effects.

3. Impact on various sectors of the port and shipping logistics market

1) International shipping

Affected by the new crown epidemic and the delay of the festival, the loading rates of various liner companies have dropped sharply since the beginning of the month, and they have increased their capacity to suspend shipping. This has also led to the shortage of shipping space in some regions and the rise in market freight rates, which has brought foreign trade companies Cost pressure.

Taking Shanghai as an example, the current suspension and loading rates of the main routes are as follows:

欧洲 Europe routes: the shipping capacity will be over 50% after the year, which is double the last year; the loading rate of large ships is only 20%, and the loading rate of small boats is 70% to 80%.

● Mediterranean routes: the shipping capacity during the Spring Festival is about 50%, compared with 30-40% last year; the market load rate is 3-4%

● North American routes: the suspension capacity is more than 40%; the loading rate is about 40%;

● South American routes: the suspension capacity is more than 40%; the cargo volume and loading rate only recover 2-3%

● Middle East routes: more than 30% of suspended shipping capacity; loading rate of 25-30%

● Indo-Pakistan route: 45% of suspended shipping capacity; loading rate is generally 25%

● Red Sea route: 40-50% of suspension capacity; loading rate is about 25%

● Australia route: more than 50% of suspended shipping capacity; less than 50% load factor

● African routes: about 50% of suspended shipping capacity; loading rate of about 20%

● Near-sea routes: Southeast Asia routes have a capacity of over 60%, and Northeast Asia routes 45%; the loading rate is 3-4%.

According to statistics from vendors on the platform of the big shopkeeper, in the second week (February 1-7) after the Spring Festival, the volume of shipping containers shipped by suppliers dropped by 24% year-on-year, and the volume in the third and fourth weeks fell sharply 82 % And 52%.

2) International air transport

Affected by the epidemic, most international flights were cancelled or the number of scheduled passenger flights between China and China was significantly reduced, and only some airlines retained cargo flights. Domestically, the delayed resumption of the factory affected the stocking period, and the intercity trailer service was also deeply affected. It is estimated that from the beginning of the first month of 2020, the export volume of air freight in Shanghai alone will decrease by 30% compared with the same period last year.

3) International Railway

Affected by the epidemic, in February, the China-Europe trains were reduced by more than half, and only a small number of special trains survived. Railway enterprises are expected to gradually resume operations in late February, and railway export traffic will gradually resume. The eastbound import train has been relatively affected, with overall capacity remaining at 7-8%.

4. Impact on foreign trade factories

According to recent sample surveys of foreign trade factories in various regions of China: Affected by the epidemic, the current situation of resuming work in foreign trade factories across the country is relatively poor. 70% of the factories have not resumed work, and there is no inventory available for export. Only factories with products are exported 23%.

From the perspective of the resumption of work in Shanghai’s foreign trade factories alone, about 40% of the companies will resume work or work from home on February 10, and another 40% plan to resume work on 2/17, and by February 24, almost all Companies will resume work in whole or in part. In terms of shipments, a small number of companies can resume shipments before the end of February. Most of them start shipping in early March, and a few companies will not even ship until the end of March. Even if shipments are resumed, only a few companies can fully recover to normal levels, and most companies can only recover to 50% -70% of the normal volume. A few companies believe that the volume will only be at the normal level of 20-30%.

Two, the main problems and difficulties currently facing

1, factory resumption is difficult, production capacity recovery is slow

Many factories and enterprises face difficulties in resuming work and restoring production capacity. The main aspects are as follows:

First, due to the restrictions of local government policies, the approval and approval process for resumption of work is too complicated;

Second, the lack of drivers and road closures caused by insufficient drivers and road closures and insufficient warehouse operations;

Thirty-three is that domestic logistics is limited, which affects the transportation of raw materials, and upstream companies cannot supply normally, resulting in production stagnation;

24. Some workers are unwilling to return to work or cannot recruit workers;

Fifth, foreign countries have restrictions on the import of goods from China, and orders from overseas customers have decreased.

In this case, many small and micro enterprises are facing huge pressures for survival. Once a failure occurs, it will not only affect the market volume, but also bring risks to the freight collection of freight forwarding companies.

2, logistics enterprises have high costs and high capital pressure

1) Cost pressure

The start-up time of logistics companies has been extended. In some areas, such as Hubei and Zhejiang, the resumption control is more stringent. Until now, they can only work from home. Even after the resumption of work, enterprises still need to invest more resources in epidemic prevention and control, preparation of masks and other materials, and staff shifts, and the office efficiency has dropped significantly. In the case of a markedly sluggish business volume, logistics companies are overwhelmed in terms of labor costs, and some companies can only choose to lay off employees in order to weather the crisis.

2) Financial pressure

Affected by factors such as delays in the start of banks and the transmission of capital pressure from production and trade enterprises, freight forwarding companies were unable to receive freight and other pre-port costs in a timely manner. At the same time, it is necessary to pay relevant fees and interest to suppliers and banks. Due to the advance payment, many freight forwarding logistics companies have tight cash flows and pressure on the capital chain.

3, Trailer driver gap is large, logistics is not smooth

1) Overview of Shanghai Regional Trailer Market

On the whole, at least in February, the supply capacity of the Shanghai trailer market is still not optimistic. Many drivers can’t get out of the house and have a large capacity gap. We have tuned 28 Shanghai fleets. The current available capacity is only 19.4%. Although Shanghai’s policy is more user-friendly, there are still fewer drivers who can return smoothly.

2) Favorable policies

On February 15, Shanghai announced the launch of the “Yangtze River Delta Outbreak Prevention and Control Integrated Transportation Vehicle Pass” (currently only applicable to Shanghai-branded transportation vehicles). Driver feedback, the application process is simple and fast, and the convenience is strong, which is conducive to the convenient passage of vehicles in the Yangtze River Delta region. Drivers who have been in Shanghai for more than 14 days need not worry about being required to be quarantined after operating across provinces; It is estimated that it will not be possible to gradually resume employment until March.

On February 15th, the Ministry of Transport announced that “toll-free roads throughout the country are free of vehicle tolls during epidemic prevention and control”, which is of great significance for reducing the cost of trailers. Taking Shanghai as an example, in order to save costs for most vehicles, they often chose to take the ground road in the daily transportation before. After the outbreak, ground road obstacles have been set up in various places, and drivers can only choose the speedway as the optimal route plan. Based on the high cost and severe shortage of transportation capacity, the current market freight of trailers generally rises by 30% -50%, which is borne by the cargo owners. The free toll of the expressway has brought tangible benefits to the cargo owners and production enterprises and reduced the additional losses caused by the epidemic. After February 17, freight rates are expected to fall to some extent.

3) Problems

The following day, the Ministry of Communications and local ports issued a number of positive policies to promote the restoration of the transportation industry. However, facing practical difficulties, such as the drivers who return to the Chinese New Year, they cannot return home smoothly, and there is still a serious shortage of on-the-job drivers. Due to the different policies of villages and towns on the restriction of personnel going out, some places need to issue health certificates, but they cannot accept and issue them in time. Vehicles to and from the railway station and long-distance passenger terminals have almost stopped, and so far the proportion of drivers living in their hometowns is still high.

After Shanghai launched the “Yangtze River Delta epidemic prevention and control transportation-physical freight vehicle pass”, some drivers went to work in Jiangsu and other places, specially presented the pass to ask the local traffic police, was told that they still only recognize the local issued pass.

4) Refrigerator transportation affected by trailer

Affected by the epidemic, strict control of entry and exit in various places caused the driver of the trailer to fail to return in time, and the returning driver was still in a 14-day quarantine period. As a result, the entire trailer market could not be resumed. In addition, the highways in some areas were closed. The trailer market capacity is difficult to recover in a short time, resulting in a backlog of refrigerated containers in many domestic ports, and severe shortages of refrigerator plugs in Shanghai, Ningbo, Tianjin and other places.

It is understood that a number of shipping companies including COSCO SHIPPING, CMA CGM and Hapag-Lloyd stated that as the cold plugging of the terminal has become saturated, all refrigerated containers will not be able to arrange unloading at the port, and the cargo will be forced to transfer to other ports And even forced to return to the port of departure! It is worth noting that all costs including but not limited to storage fees, demurrage fees, electricity fees, monitoring fees, plugging fees, and additional costs incurred for subsequent transportation to the original destination will be borne by the owner.

4. Strict approval of warehouse construction, unable to provide 24/7 service

According to our sample survey of some foreign trade warehouses in Shanghai, Shanghai’s requirements for warehouse resumption include: reporting to the jurisdiction where the warehouse is located before resuming work; repatriation of employees from outside Shanghai who have been in isolation for 14 days; .

At the policy level, warehouses need to be declared and approved before February to resume work. Fengxian area controls are relatively strict. Only a few warehouses have received approval this week. The common problems in various warehouses are mainly the inability to provide 24-hour service due to insufficient staff return rate and low cargo volume, and large-scale operations need to be confirmed in advance. Incoming goods, vehicles, and personnel from Hubei or other key epidemic areas are generally not accepted, and some warehouses restrict drivers from getting off when they enter the park. It is optimistic to estimate that the existing problems will not gradually improve until March.

5, effective customs measures, high requirements for customs officers

近期 The convenient customs clearance and green channel policies recently given by the customs have played a powerful role in speeding up customs clearance and improving customs clearance efficiency. At present, most customs clearance is paperless. Customs clearance companies can arrange home office without affecting the normal customs clearance work.

Because there are too many imported anti-epidemic materials, the company has no prior experience in this area, and the company has a lot of requests for customs consulting. It is necessary for customs officers to strengthen their learning, keep abreast of new customs policies, and give import and export companies timely answers.

6. Railway cargo collection is difficult, and the volume of cargo is slow to recover

Production companies are relatively cautious in returning to work. Enterprises and related industries in some regions have been greatly affected, and supply demand is limited. In terms of transportation, especially inter-provincial collection and delivery stations, the biggest difficulty lies in the insufficient allocation of trailer resources, which must be determined by the evolution of the epidemic situation and the situation of the restoration tool before mid-March. At the same time, warehouses, storage yards, and railway yards are also greatly affected, and more than half of the project is to be spent.

Three. Suggested measures for local governments

For those logistics enterprises that have performed outstandingly in the fight against the epidemic, they have opened up another lifeline and hope that the government can give them key support.