Before giving you a round-up of the current news from Publiship offices around the world, I first want to cover the situation with shipping from Asia to Europe and North America, and to a lesser extent, Australia too. I’ve mentioned in previous messages that space on ships has been becoming increasing more difficult to secure, and it is now at critical stage. For shipments out of Hong Kong and Yantian, we are generally getting our cargo away, occasionally paying a premium over contract rates in order to do so, but further north, Shanghai and Ningbo ports are seriously overbooked, and we are already calling in favours to get bookings confirmed for w/c Sept 21st. It’s a similar situation with Singapore and Port Kelang, where we were offered vessels three weeks ahead when trying to book for the USA. Spot rates to Europe are up 29% on the same period last year; the US West Coast over 125% up, and US East Coast 64%. One new development is that some shipping lines are rolling out an online quote/booking tool which comes with guaranteed space. I’ve tested one of these today, and the rate quoted has a 50% premium over our contract rate to the UK. The point to note about these options is that with the ship already fully booked, that container paying 50% more is going to bump off something paying less. All of this is a knock-on from the very quiet period in Q2, when orders were on hold, little cargo was moving and shipping lines were forecasting their worst figures for years. The return to some kind of normality has brought about a rush of orders, and predictions are that the situation will continue until mid-October, with Lines now looking at records profits – it’s quite a turnaround. It’s also important to point out that overall cargo volumes are still considerably lower than previous years, and the current space situation is a result of capacity management policies employed by Lines to support freight rates.
It is vital that we have advanced knowledge of your forthcoming shipments in order to book ahead and secure space, particularly from Shanghai/Ningbo, and S.E. Asia, and larger shipments out of Hong Kong and Yantian. We’re still getting calls from printers with cargo ready and looking to ship containers immediately with titles we knew nothing about and hadn’t pre-booked.
The Covid-19 infection rate in Hong Kong has been falling over the past few weeks, but social distancing measures allowing no more than 2 people gathering together and requiring a mask in all public areas are still in place. There will be some relaxation in rules from Friday, with restaurants allowed to serve until 22:00 (but still only 2 people per table), and cinemas, gyms, massage shops etc can re-open. Publiship Hong Kong are now operating with all staff in the office, with some flexibility of start and finish times. Logistically, everything is working normally, and our volumes over July and August were higher than anticipated. Shipping schedules from Hong Kong and Yantian are attached.
Singapore’s Prime Minister Lee Hsien Loong laid out the early missteps his government made in dealing with the coronavirus pandemic this year in a speech earlier today, warning against relaxing containment efforts too early. “With hindsight, we would certainly have done some things differently,” Lee said in his first major parliamentary speech since winning re-election in July. “I wish we had known earlier that people with Covid-19 were infectious even when asymptomatic, and Singapore should have quarantined all returning citizens from abroad earlier, rather than just those from certain countries initially. At the time, we took the best available scientific advice, all this is wisdom after the fact. We must learn from these errors, and do better the next time. But in the fog of war, it is not possible always to make the right decisions.” Singapore, which was lauded globally for its efforts to contain the outbreak in its early days, had a major setback when infections spread among its migrant worker community housed in close living quarters. The country ramped up its virus response, made masks mandatory, imposed a two-month partial lockdown, and now has among Southeast Asia’s highest reported rates of testing. The number of cases remains relatively small, and have been declining, while fatalities are low. Lee also warned against the strategy of allowing the virus to spread in the population to achieve herd immunity, and urged vigilance amid calls for a relaxation of social distancing measures as people grow weary of the prolonged rules. “The Covid-19 virus remains as infectious and potent as it was before,” Lee said. “If we relax these measures now because the numbers have come down, we will have a resurgence.”
It was sad to note that Tien Wah Press are no longer accepting orders and will cease printing operations from March 31st 2021.
In Malaysia, the federal government announced that the Recovery Movement Control Order (RMCO) will be extended until December 31, as the Covid-19 pandemic shows no sign of abating. Nearly all sectors have already been permitted to operate, apart from a small number such as night clubs and entertainment centres where the new normal is difficult to uphold. Sporting activities are permitted, but without the involvement of international participants and spectators. Foreign tourists are still prohibited from entering the country to prevent the emergence of imported cases in Malaysia. The RMCO was the latest in a series of movement control orders stemming from the initial Movement Control Order which began on March 18 under which all gatherings and public activities were suspended, including businesses and schools; borders were closed and tight restrictions imposed on people’s movements. The restrictions were gradually lifted and since July, schools and most businesses have been allowed to resume, as well as religious gatherings, domestic travel and entertainment and sporting activities.
Border restrictions remain for most states in Australia, with just a few exceptions. The state of Victoria is seeing a gradual decease in new Covid infections which is a direct result of their lockdown policy. The government is still not allowing Australians to travel overseas. Domestic road freight still moving inter and intrastate with very little delay. Shipping Lines have cut vessel services for most trade lanes to Australia. Having reduced capacity and with buyer confidence returning, container space is becoming a major issue. Freight rates are increasing by the week. Publiship have so far still maintained our 20 year old record of zero short shipments to Australia and with our block bookings on the major shipping lines we are managing to secure space for all of our regular customers. Disruptions at Australian Ports by stevedores (not heavily reported in the media) are increasing but so far with no major impact on the time it is taking to process containers from ship to delivery, but we are concerned this will become a factor in the coming months. There is a glut of empty containers , with yards full and truckers having difficulty getting them lifted off – a situation being replicated around the world and mostly as a result of cancelled sailings. Where cargo imbalances exist, there are fewer ships to return empty containers to where they are needed. Hopefully, as shipping lines return to full schedules the situation will ease. On a positive note, business confidence really does seem to have returned and our loadings to Australia for the last four weeks have surpassed the same period last year.
In the United States, reports of new cases have fallen significantly around the country since July; they are now flat in 26 states and falling in 15 others. But in nine states, cases are still growing, and in some, setting records — especially in the Midwest. Iowa, Kansas, Minnesota, North Dakota and South Dakota all added more cases in a recent seven-day stretch than in any previous week of the pandemic. Together, they reported 19,133 new cases in the week ending Sunday, according to a New York Times database — 6.4 percent of the national total, though the five states are home to only 4 percent of the population. In each, some of the biggest surges in new case numbers have come in college towns. Across the country, state and local governments are bearing down on student partying as thousands of cases have erupted with the return of students to college campuses. California took some of its first steps on Friday toward easing severe coronavirus-related restrictions imposed amid a summer surge in cases. Gov. Gavin Newsom unveiled what he described as a simpler plan that would allow some counties, including San Diego and San Francisco, to reopen many businesses indoors as early as Monday under limited circumstances, such as gyms and houses of worship, as well as permit indoor dining. Bars will remain closed in most of the state. Gov. Philip D. Murphy is giving New Jersey districts the option to offer all-virtual classes when school resumes next month, relaxing his original requirement that teachers provide some in-person classroom instruction. The policy shift comes as the state’s powerful teachers union for the first time publicly called for an all-virtual start to the school year given the risks still posed by the coronavirus. A public health laboratory in Nevada has reported the first confirmed coronavirus reinfection in the United States, and the first in the world known to have brought on severe symptoms.
In an interesting logistics development, the Federal Motor Carrier Safety Administration (FMCSA) on Friday proposed a Split Duty Period Pilot Project to evaluate the safety impact of allowing drivers to work beyond the 14-hour daily on-duty HOS limit by stopping their clocks for anywhere from 30 minutes to three hours. That added flexibility could provide some relief for shippers as well as drivers. Although drivers are still limited to 11 hours a day behind the wheel, changes in how they manage those hours may give them more time to meet shipping deadlines, in effect creating additional capacity. Freight forwarders and logistics experts are now predicting that US imports will remain at elevated levels at least through October, fueled primarily by e-commerce fulfillment and a steady flow of personal protective equipment (PPE). The continued surge in imports will push the already record-high spot rates in the eastbound trans-Pacific even higher.
There was an interesting article in the New York Times last week regarding capacity problems in the US print industry, something we saw first-hand last week when airfreighting over 100 tonnes of books to the US. https://www.nytimes.com/2020/08/27/books/printing-companies-backlog-book-publishing.html?smid=tw-share
India has set a record for the world’s highest single-day increase in coronavirus cases. The nation, the world’s third-most infected, on Sunday reported 78,761 new cases in 24 hours, passing the number posted in the US on 17 July. The rise comes as the government continues to lift restrictions to try to boost an economy that lost millions of jobs when the virus hit in March, with the Lock Down 4.0 scenario in place. They have laid down precautions such as malls can function but multiplexes cinemas within malls and outside should remain closed. People must continue wearing face masks and take all preventive safety measures. All commercial/industrial establishments are functioning with formal Standard Operating Procedures in place, but public transportation is yet to commence. Here too, shipping lines are able to increase freight rates as vessels are practically sailing at full capacity. Ports & Terminals are functioning at normal pace. Since international air passenger operations are still under suspension and only freighters are in operation, airfreight rates remain extremely high. Hopefully airfreight operations will be stabilize during October/November when international passenger operations re-commence.
Across Europe, the infection rate continues to rise. German children are now back in school, but the bigger concern is the infection rate in younger adults. There were large protests in Berlin over the weekend as demonstrators rallied against Covid-19 prevention measures. Police arrested 300 people after demonstrators failed to social distance and wear masks and an attempt was made to storm the Reichstag, seat of the German parliament. Publiship Germany will continue to work on a rotating home/office basis until the end of this year.
Italy has seen a fourth consecutive week of infection rises, with most occurring within the country and 28% being imported by foreign nationals. The new school year began yesterday, with teachers returning ahead of pupils for planning purposes.
In Holland, the government is still promoting home-working wherever possible. Social distancing is set at 1.5 metres and a maximum of 6 visitors are allowed in any home, excluding children under 13. Whilst coronavirus cases were on the rise, they have stabilized over the past two weeks.
Here in the UK, the government is trying to get people back into offices in order to energise city centre businesses, so far with little evidence of success. Cases across the country are on the rise, and local lockdown measures are being used to combat spikes. Having announced yesterday that restrictions were lifted in Bolton and Trafford, the government has ordered the restrictions back in place after just 12 hours. Schools are returning, but surveys suggest 17% of parents are reluctant to have their children attend. Pharmaceutical giant Astrazeneca has expanded its agreement with UK company Oxford Biomedica to scale up production of its coronavirus vaccine candidate. Oxford Biomedica has agreed to produce tens of millions of doses of the vaccine candidate, which is being developed by AstraZeneca in partnership with the University of Oxford. The candidate recently entered late-stage trials in the US, with 30,000 people enrolled. In a statement, AstraZeneca said its global manufacturing capacity was close to 3 billion doses.
Our current plans at Publiship UK are to have split teams of staff return to the office from October 5th, on a weekly rota of home/office, but some flexibility remains in the event that circumstances dictate otherwise.
Every year, the August Bank Holiday creates difficulties for transport availability which takes 3 weeks to smooth out. The transport industry operates at full capacity at this time of year, and the loss of a day – 20% of the weekly availability – has a major impact. Shipping line transport for full containers is now fully booked up to September 15th, and independent hauliers have little availability. We are working hard to get everything arriving covered within the free periods for container detention, but delays to delivery of some FCL containers are likely. The recent bad weather hasn’t helped, with Southampton being closed during last weeks’ storm. The CMA CGM Jean Mermoz last week did a ‘cut and run’ leaving Southampton with a large number of containers still on board, having run out of time. The vessel is due back in today to discharge the balance of containers.