NOVEL CORONAVIRUS UPDATE - Yusen Logistics...CMA/APL/HPL/ONE resume to work on Feb.17th; Others...

NOVEL CORONAVIRUSUPDATE

Date : Feb 26th, 2020

227 February 2020 Copyright © 2020 Yusen Logistics. All rights reserved

Highlights – Feb 26 th

China – foreign funded firms resume production

▪ Foreign-funded enterprises have resumed production amid epidemic control efforts in different parts of China with theconfidence that the country can win the battle against COVID-19.

▪ The commercial authorities of Hebei province have been promoting orderly production resumption for foreign-fundedenterprises while strengthening efforts on epidemic prevention and control during the fight against the novel coronavirusdisease.

▪ Many foreign enterprises including Nestle, Louis Dreyfus Company and Trelleborg Wheel System have resumed productionwith the safety of staff guaranteed to deliver their confidence in the rapid recovery of the Chinese economy.

▪ Monetary authorities will also provide special credit quotas for private, small and micro companies impacted by the virusoutbreak. The central bank governor urged financial institutions to "appropriately reduce interest on loans for small andmicro enterprises" to prevent capital chain ruptures.

▪ Foreign exchange regulations will be streamlined further to facilitate cross-border trade and investment and support economic development, coronavirus epidemic control efforts, the country's top foreign exchange regulator said on Tuesday.

Source : http://www.chinadaily.com.cn/a/202002/26/WS5e55ad03a31012821727a489.html

http://www.chinadaily.com.cn/a/202002/26/WS5e55ad03a31012821727a489.html



Vietnam – cross border trade with China

▪ Agricultural products are in priority to release

▪ Due to lack of workers, the truck releasing efficiency is very low

▪ Approximately 700 trucks are pending to release, Lang son is the most dense border gate.

▪ Timeline as below▪ Feb 20 to 22 : start to open border gate (with low volume of truck and focus to agriculture food)

▪ Feb 23 to 25 : open border gate as normal (all type of goods) but the truck release capacity is very low due to lack of labours

▪ Feb 26 : open as normal but very congested at the borders

▪ Border gate is opened as normal with some conditions as below▪ Driver no need to isolate after comeback from border but he/she must be in personal-protective-equipment when cross border gate

▪ Pre-register with Custom House (advance information submitted)

▪ Required wearing face masks and wearing protective gears before crossing the border, no quarantine up to now.

Source: https://www.moit.gov.vn/web/guest/tin-chi-tiet/-/chi-tiet/thong-quan-hang-hoa-ngay-thu-2-tai-cua-khau-tan-thanh-lang-son-van-rat-cham-%C4%91en-chieu-ngay-21-02-2020-chi-xuat-khau-%C4%91uoc-26-xe-17905-22.html

https://www.moit.gov.vn/web/guest/tin-chi-tiet/-/chi-tiet/thong-quan-hang-hoa-ngay-thu-2-tai-cua-khau-tan-thanh-lang-son-van-rat-cham-%C4%91en-chieu-ngay-21-02-2020-chi-xuat-khau-%C4%91uoc-26-xe-17905-22.html



South Korea – people work from home

▪ Many major companies are letting their employees work from home or have flexible working hours after the governmentraised the alert level to “serious” and the number of cases here surged. The nation’s largest conglomerate Samsung Groupdecided Monday to allow pregnant employees to work from home and delivered the information to each affiliate throughits personnel teams.

▪ Also, e-commerce firms, including Coupang, WeMakePrice and Tmon, and global software firms, such as Intel, Dell andMicrosoft, have all advised their employees to work from home. The Korea Chamber of Commerce and Industryrecommended about 180,000 member companies to work at home to prevent the virus spread, mostly when people usepublic transportation.

▪ A few countries have started to impose bans on travelers coming from South Korea’s regions most affected by the virusoutbreak.

• Japan : government has begun working to bar foreign nationals from the southern areas of South Korea

• Philippines : they have barred travelers from South Korea’s North Gyeongsang province from entering its country

• Vietnam : it has banned tourists from virus-hit areas of South Korea

• Singapore : it would ban all visitors who have recently traveled to Daegu, a city in South Korea where many cases have been reported.

Source : https://www.cnbc.com/2020/02/26/coronavirus-latest-updates-asia-stocks.html

https://www.cnbc.com/2020/02/26/coronavirus-latest-updates-asia-stocks.html

5


Italy – coronavirus affect Italy’s wealthy regions

▪ Economic impact of the coronavirus outbreak in northern Italy’s Lombardy region became alarmingly clear.Whether it’s supply disruptions, production halts or clients steering clear of Lombardy, businesses in Italy’seconomic heartland are counting the rising cost of the spread of the virus in a country that was alreadyteetering on the brink of recession.

▪ As the number of people infected by the virus in Italy rises above 300 -- mostly in the rich, industrial north --restrictions imposed to stem its spread are threatening deeper economic woes. About a third of Italy’s outputcomes from Lombardy and Veneto, the two most-hit regions that are home to 1.1 million very small businesseswith fewer than nine employees.

▪ The European Union is not planning to suspend the Schengen▪ Agreement, not even partially, despite the Coronavirus

▪ outbreak all over Europe now. The borders between Italy

▪ and other European countries are still opened.

▪ Many large companies have asked employees to work▪ from home and cut back on business travel. With people

▪ staying home, a whole slew of ancillary businesses are

▪ taking a hit -- from restaurants, bars and cafes to car services.

Source : https://finance.yahoo.com/news/coronavirus-piles-more-woes-business-050000952.html

https://finance.yahoo.com/news/coronavirus-piles-more-woes-business-050000952.html


▪ US

Non-passenger vessels are allowed to operate in the US with restrictions if they have been to China or embarked passengers inChina within the last 14 days under the condition that there are no sick crewmembers. Any vessels with sick crewmembers arerequired to notify the nearest Coast Guard Captain of the Port.

▪ Australia

Any vessels that have left China or transited through the country after 01 February and less than 14 days prior to the date will berequired to meet coronavirus requirements set by the government.

▪ Vietnam

All Crews on those vessels not ever called Chinese ports, but have Chinese Nationality & signed on board around 14 days are alsonot allowed to go onshore when calling ports.

Current process of quarantine takes 1 to 2 hours, thus ETA of vessel will not be impacted and carrier will not revise ETA on theirarrival notice as initial sending.

▪ Singapore

Maritime and Port Authority of Singapore (MPA) has implemented temperature screening at all sea checkpoints. Visitors having atravel history in Hubei or possessing PRC passports issued in Hubei, will not be allowed to enter or transit through Singapore.

▪ Turkey

Cargo ships have been permitted to dock although they will undergo strict inspections.

Restrictions of Vessels from China


Restrictions of Vessels from China

▪ Indonesia

Vessels that have visited China during their last 10 port stops will be thoroughly inspected by the Port Health Authority.Anyone suspected of being infected with the virus must be treated by authorities.

▪ Philippines

The Philippine Ports Authority said workers in ships coming from China are prohibited from disembarking to prevent the spread ofthe virus.

▪ South Korea

Any vessel that visited China within the last 14 days will be inspected by officials from the Korea Centres for Disease Control andPrevention agency before entering. The vessels can only enter South Korean ports if the inspectors find no sign of infection andgive them the all-clear.

▪ Kenya

There will be an increase of vessels’ docking time at the port, as Kenya Ports Authority (KPA) screen all crew members for thevirus and inspect all vessels entering their ports.


Yusen Logistics Operation

Yusen China offices

▪ From Feb 24th onward, total 67 staffs (around one-third of SCS staff in China) will work at office

▪ Work-from-home or remote office will still be the dominant mode

▪ No disruption of operation

▪ Communication via e-mail, conference call or chat group

Yusen Italy and South Korea

▪ No disruption in operation is reported

Yusen HKG Control Tower (CTO)

▪ Starting from Feb 17th, HK CTO exercises alternative shifts at office, i.e. around 50% of the staff are workedfrom home, while another 50% are worked at the office.

▪ No disruption of operation & communication


Origin Warehouse Truck Carrier Terminal

Dalian Normal operationTrucking service is still limited in supply, but gradually resume to normal.

Resume normal business operation on Feb.10th, most carrier will arrange home work for certain period, not sure the actual date; Official announce Office to open on Feb.10th.

Terminal as normal

Fuzhou Normal operationTrucking service is still limited in supply, but gradually resume to normal.

Resume normal business operation on Feb.10th; Office to open on Feb 10th.

Terminals as normal

NanjingOpened on Feb 21st, subject to availability of labor resource

Trucking service is still limited in supply, but gradually resume to normal.

1. COSCO NKG will be back to normal work on Feb.3rd in office; 2. PIL and WHL are still waiting for further notice 3. Others will resume normal business on Feb.3rd at home, offices will be open on Feb.10th

Terminals as normal

Ningbo

Trucks from all cities of China are allowed for entry, only if drivers can pass the health check and stay in their vehicles.1. Ningbo National Logistics – Mon to Sun 08:30 until 20:00 2. Ningbo Port Southeast Logistics – Mon to Sun 08:00 until 2:00

Trucks from all over China are accepted, on the condition that the drivers can pass the health check and stay in the vehicle during the entire operation process.

MSK resume work on Mar.1st; CMA/APL/HPL/ONE resume to work on Feb.17th; Others still remain the same

Terminals as normal

Qingdao Normal operationTrucking service is still limited in supply, but gradually resume to normal.

1. CMA/ONE will implement home office mainly plus office on duty 2. MSK announced all staff work at home until the end of Feb3. Others carriers are home-office in majority

Terminals as normal

Shanghai

EED & DFJF (located in Linggang) are resumed to normal operation. Except from Hubei province, trucks from all over China are accepted, drivers are subject to health checked and limited in assigned operation area.


All carriers will arrange on-duty staff to ensure operation before Feb.10th

Terminals as normal

Yusen Logistics Operation:CFS,Trucking,Carriers


** Updated in red

Yusen Logistics Operation:CFS,Trucking,Carriers

Origin Warehouse Truck Carrier Terminal

TianjinWarehouse operation is normal, 1 day reservation in advance is needed.


The time of resuming normal business operation to be pending, most carrier will arrange home work from Feb.3rd.

Terminals as normal

Wuhan Resume to work NO earlier than Mar 10th 24:00Resume to work NO earlier than Mar 10th 24:00

Most of the main carriers are resumed in form of work-from-home since Feb 3rd

On duty staff arranged

Xiamen Normal operationTrucking service is still limited in supply, but gradually resume to normal.

MSK resume work on Mar.1st; CMA/APL/HPL/ONE resume to work on Feb.17th; Others still remain the same

Terminals as normal

Shenzhen Normal operation

1. Gradually resume to normal operation; 2. Cross cities transportation to Shenzhen : need to pre-register and people need to undergo health check before entering into Shenzhen city. No major disruption as long as conditions are fulfilled.

Since Feb 10, carriers are either on shift duty, or work from home

Terminals as normal

Italy Normal operation Normal operationNormal in operation, with both work at office and work from home

Terminals as normal

South Korea Normal operation Normal operation Normal in operation Terminals as normal


Market Update Airfreight

Sea-Air mode

▪ A solutions could help shippers to avoid airfreight shortages and price spikes as production lines in China soon getback underway.

▪ Ocean transport to move the goods to a transshipment point, before flying to destination, could prove attractivefor semi-urgent shipments that want to avoid any airfreight price surges or space shortages, but can’t afford towait for long before arrival to the consumption markets .

▪ Singapore is around 10 days quicker than the traditional air-sea hub of Dubai, adding value and speed.

Shortage of capacity

▪ About 70 airlines have canceled all international flights to mainland China, and an additional 50 have curtailedoperations, resulting in an 80% reduction in foreign airline capacity and a 40% reduction by Chinese airlines.

▪ American Airlines, and United Airlines suspended service to China and Hong Kong until late April, while AirCanada, British Airways and Finnair extended flight suspensions to mainland China until late March and cut moreflights to Hong Kong.

12Copyright © 2020 Yusen Logistics. All rights reserved

Production

▪ Late opening of factories may result to manufacturing and delivery delays.

▪ Parts and material packaging availability severely impacted within the lockdown cities. Not all establishments and authorities are officially open.

▪ Workers shortage as returning workers may be restricted and subject to 14 days quarantine. Public transportation is also limited.

Transportation

▪ Intercity transportation might be limited due to entry and exit measures implemented by various cities

▪ Inland transit time could be longer due to road blocks and checkpoints.

▪ Possible drivers shortage and truck supply.

▪ In some provinces, barge and feeder operation has been suspended. Trucking service is very difficult to arrange and therefore significant price increase is expected.

Space and Equipment

▪ Slow booking release or response from carrier as work from home or booking agent team not in full force.

▪ Port congestion.

▪ Container rollovers and possible delay.

▪ Tight vessel space and equipment availability could be expected once production resumes normal as cargo readiness are all at the same time.

▪ Limited air cargo space due to suspended flights.

▪ More blanked sailings and increased freight rates

Potential Impact To be Considered

1327 February 2020

NOVEL CORONAVIRUS UPDATE - Yusen Logistics...CMA/APL/HPL/ONE resume to work on Feb.17th; Others...

Documents

Transcript of NOVEL CORONAVIRUS UPDATE - Yusen Logistics...CMA/APL/HPL/ONE resume to work on Feb.17th; Others...