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The Impact of COVID-19 on Freight Sectors

July 31, 2020

The COVID-19 crisis started out with just a few rogue cases in Wuhan, China. Since its initiation, the virus has since spread to the furthest corners of the globe, hospitalising millions and killing hundreds of thousands. The impacts of COVID-19 have been as far reaching as they have been deadly, with no greater impact felt than in the freight and shipping sectors. Capacity utilisation at the biggest ports in China, for example, has fallen between 20-50% since the outset of the virus. Earnings from the Persian Gulf to China have fallen by approximately 80% and productivity in Europe is down by about 30%.

Freight Capacity

The impacts in Australia have yet to be felt to such a degree, but there are still huge losses abundant within the freight and shipping sectors of the Australian economy. Logistics networks are experiencing bottlenecks from online retailers as orders pile up and shipping companies don’t have the staff available to cater to delivery requests on time anymore. Record numbers of parcels have piled up at Australia Post, says CEO, Christine Holgate, as there has been a shift from bricks and mortar retailers to online distributors. It’s a tough time, especially for anyone working from home waiting for a shipment to arrive.

Shipping Industry and Ocean Freight

The impact of COVID-19 on shipping has been notable. Any shipping vessels are being turned from Australian shores unless they have been at sea for more than 14 days, says a recent regulation passed by the Queensland Government that has been implemented by other states.

Air Freight and Air Cargo Capacity

International flights have been delayed for up to six weeks, which has placed major delays on international commerce.

Supply Chain Delays and Force Majeure Closes

Australia Post is still operating throughout the pandemic, however. While some stores have closed and there have been changes to collection times, by and by, if you’ve ordered something online, chances are your friendly neighbourhood postie will still be able to deliver it. International deliveries, however, promise to see far greater delays in delivery as flights coming in and out of Australia are experiencing significant delays. It’s best to wait a couple of extra days before making inquiries, however, as phone lines are just as busy as the rest of the postal network.

Health and Safety

Major delivery companies, including Australia Post and FedEx have put a temporary suspension on signing for parcels to stay compliant with social distancing measures and prevent the spread of covid-19 outbreak. This has seen the development of online facilities that help recipients of packages work with their delivery service to identify the best way to collect their parcel upon delivery. Road freight is still operating, but is facing some delays.

Recovery

Despite this bad news, the world’s major ports have already begun to recover from the initial impacts of the COVID-19 virus. Shipments from China have begun to filter through to Australia and major Italian, Spanish and French ports remain open, despite countries maintaining travel restrictions on passenger flights. Supermarket retailers report being back on track with orders and that panic buying has ceased. Despite this good news, dentists only have 4-5 weeks of surgical masks available and are unable to practice without them.

It’s certainly a trying time for everyone right now. Keep up to date with the Cooltrans blog for all relevant information about our operating procedure during the COVID-19 pandemic. Contact us for all your refrigerated shipping needs or for any more information about our products and services.