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Customer Advisory COVID-19 Global Update

April 13, 2021

Please find here the newest edition of our COVID-19 global customer advisory update. Thanks to growing vaccination coverage and decreasing pandemic impact, parts of the world are heading towards more regular conditions of business. In contrast some other geographies see new surges of incidents and face even tougher restrictions for social and business life.

For the time being, the conditions under which we all operate will continue to be disruptive and far from normal. We look forward to continue our update services as long as the global pandemic influences the economy, hence our common business.

Please continue to be engaged with your DB Schenker Account Managers on your latest plans, prices and projections. They will invest the utmost effort to support your business with corresponding solutions.

Executive Summary

Air Freight

  • Market demand situation remains exceptionally strong outbound US and Europe in 2021 as the imbalance in market supply and demand continues throughout this year with strong airfreight demand month-on-month as well as year-on-year.
  • Expected COVID-19 vaccines volumes are changing as the approval process for vaccines progresses with further vaccines being approved. Largest exports are expected from European production sites with supply focusing on exports from Europe Asia Pacific, Latin America and Africa.
  • Market demand situation in 2021 is expected to further increase based on recent market developments leading to a congested airfreight market throughout this year.

Ocean Freight

  • Global market tries to cope with the consequences of the Suez blockage which impacts the supply and demand curve heavily, not just in the EU and APAC.
  • Peak of non-availability of equipment and vessel space in Asia visible for the remainder of April and May.
  • Volume pressure ex APAC to all destinations remains strong; to last well into 2nd quarter. Volumes ex Europe soaring up, especially to the Americas, leading to increased rates.
  • Global carrier schedule reliability down to just 30%. Increased fuel cost will impact rates from Q2 / 2021 onwards.

Land Transport

  • Restrictions to contain the COVID-19 pandemic are established in several European countries, directly or indirectly affecting transportation.
  • In case of disruptions, we follow our pre-defined contingency plans to ensure flows of cargo. We are adapting our transport service offerings daily to the needs of our customers.
  • Some receivers continue to have limited operations. All shippers may check the delivery possibility with the consignee to avoid cost for storage or return shipments.

Contract Logistics

  • While the global situation regarding COVID-19 remains diverse, our operations and respective customer services are stable.
  • Hence, we continue prioritizing protection of our staff and keeping our customers’ businesses running, BCP’s and preventive measures are in place and monitored around the world.
  • We carry on supporting our customers on short notice globally with offering all warehousing services and idle space short-term.
  • To support COVID-19 vaccination, medical centers and respective treatments, we offer handling of medical devices and PPE worldwide, as part of our integrated end-to-end healthcare services.

Global Market Updates

Various pharmaceutical companies have received emergency approval for COVID-19 vaccines. Further vaccines are in the pipeline or emergency approval has been requested already. With this acceleration of vaccines being approved in many countries we do observe an increase of COVID-19 vaccine production as well as required distribution. Countries that are today already involved in the healthcare sector are also highly involved into this increase in demand. This is a combination of either ingredients required to produce the vaccine or the finished vaccine itself.

Based on these recent developments we do not expect major capacity challenges due to COVID-19 vaccine distribution in Q2 / 2021, but an increasing demand as of the second half of the year. All supply chain partners will be required to closely collaborate to support the distribution and mitigate potential negative impacts or disruptions through the end-to-end transportation.

For successful distribution, storage, repacking, and administration of a COVID-19 vaccine, additional medical supplies are needed – including needles, syringes, alcohol prep pads, surgical masks and face shields, gloves, mixing kits and additional PPE. Being part of our integrated end- to- end healthcare services DB SCHENKERlife+ with licensed and regulated facilities, alongside dedicated and qualified staff, we offer all conceivable warehousing services to handle medical devices and PPE, while supporting respectively institutions and industries globally.

  • Global

(Apr 13, 2021) - The airfreight market continues being congested as shipper demand is reaching peak levels across all major regions. The demand for airfreight has reached a peak for exports and imports at major European airports as the pandemic continues to progress. The ongoing challenge remains that air cargo is focusing on primary airports as the pandemic further impacts the available passenger capacity and flight cancellations across all regions.

Even though domestic air travel and demand in the US has recently improved the long-haul international passenger demand remains at very low level. An additional impact is caused by the immigration regulations and quarantine measures that severely impact the ease of international travel during the pandemic across various countries. An improvement is not expected before major countries have achieved a minimum immunization through COVID-19 vaccines which is not expected before end of 2021.

The largest unexpected currently remains as to how other transportation modes will recover, e.g. the ocean freight market and container availability as a major shift of transport modes is currently ongoing due to delays in international supply chains. If there is no major improvement foreseen, the airfreight market will continue to be congested throughout 2021. Most critical therefore remains to jointly review forecasts, future shipping plans and potential changes in volumes to manage the operations as good as possible during the challenging times ahead with continuous disruptions in global shipping. Please reach out to your local DB Schenker teams and account managers to plan your volumes as we also continue to expand our Global Own Controlled Flight Network to supply our customers with additional stable capacity access and operations.

Our DB Schenker own controlled network includes flights on following routes:

→ New from April 1 (fueled with SAF): Frankfurt (FRA) – Shanghai (PVG) – Frankfurt (FRA)
→ New from April 1: Shanghai (PVG) – Singapore (SIN) – Sydney (SYD)
→ Chicago (RFD) – Munich (MUC) – Tokyo (NRT) – Seoul (ICN) – Munich (MUC) – Chicago (RFD)
→ Chicago (ORD / RFD) – Seoul (ICN) – Shanghai (PVG) – Chicago (RFD)
→ Munich (MUC) – Chennai (MAA) – Munich (MUC) – Chicago (RFD)
→ Frankfurt (FRA) – Dubai (DWC) – Mumbai (BOM) – Frankfurt (FRA) – Atlanta (ATL) – Frankfurt (FRA)
→ Frankfurt (FRA) – Chicago (ORD / RFD) – Frankfurt (FRA)
→ Frankfurt (HHN) – Shanghai (PVG) – Frankfurt (HHN)
→ Luxembourg (LUX) – Indianapolis (IND) – Luxembourg (LUX)
→ Shanghai (PVG) – Luxembourg (LUX) – Shanghai (PVG)
→ Frankfurt (FRA) – Beijing (PEK)
→ Beijing (PEK) – Frankfurt (FRA)
→ Frankfurt (FRA) – Shanghai (PVG)
→ Shanghai (PVG) – Frankfurt (FRA)
→ Shanghai (PVG) – Chicago (ORD)
→ Frankfurt (FRA / HHN) – Zhengzhou (CGO)
→ Zhengzhou (CGO) – Frankfurt (HHN)
→ Zhengzhou (CGO) – Amsterdam (AMS)
→ Hongkong (HKG) – Chicago (ORD)
→ Hongkong (HKG) – Frankfurt (HHN)

Career Capacity Development 1-12/2020

More detailed information on this new flight schedule can be found by clicking here.

  • Europe 

(Apr 13, 2021) - All offices remain in full operation with access to terminal handling and ground transportation. All our European hubs deliver import and receive export freight with no backlogs recorded towards the weekend. Operationally, our linehauls to and from the hubs are running as scheduled. In some areas, our cross-border trucks might experience some minor delays.

→ Please get in touch with your DB Schenker Account Manager for more information.

  • Asia Pacific 

(Apr 13, 2021) - There are no updates on any impacted operations due to COVID-19, with status largely remaining unchanged.

Some countries in the region are reporting recent recurring waves of infections (such as India, the Philippines, Thailand, South Korea, Japan) with targeted lockdowns and emergency measures being triggered. Some impact or delays may be expected. This underscores the continued risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation.

Control measures remain in effect. Our air freight operations remain available to support customer needs. Delays / backlog may be expected in customs clearance and transportation. Alternatives to move / transport cargo via other gateways / routes are being established and stop-gap measures for labor / driver shortages are being deployed where necessary. Customers may contact the respective DB Schenker representatives for support or solutions if required.

Capacity is expected to remain volatile. We remain vigilant in monitoring the situation to mitigate events with potential impact to operations. Do refer to our Global Flight Network’s additional scheduled charter services for more solutions that can meet your needs.

  • Middle East/Africa 

(Apr 13, 2021) - Overall, the air freight operations in the countries remain uninterrupted and we continue to serve our customers. Only international passenger flights have been suspended in Saudi Arabia and Oman until further notice.

Situation

Country

No operational restrictions for air cargo business         

Angola, Bahrain, Egypt, Kenya, Namibia, Mozambique, Oman, Qatar, South Africa, Saudi Arabia, UAE

→ Please get in touch with your DB Schenker Account Manager for more information.

  • Americas 

(Apr 13, 2021) - Continued strain on capacity on most trade lanes as market demand grows but passenger aircraft cargo capacity remains slow returning to compensate. In addition, import terminals are at times running behind in transitioning cargo creating challenges. DB Schenker closely monitors airport operations to mitigate any impacts to our customers to keep them informed. Regarding market capacity constraints, DB Schenker’s own controlled flight network both transatlantic and transpacific are providing secure capacity for our customers, and our airport-based offices are providing the necessary coordination to provide the fastest release of cargo possible. Our Rockford (RFD) gateway is supporting our flight operations into the mid-west / Chicago area and providing an excellent alternative.

Situation by trade lane is as follows:

USA – Europe

→ Market demand continues moderate to strong. DB Schenker maintaining five 747 freighter flights per week as part of its Global Flight Operations Program to provide additional air cargo capacity to Europe. These flights are operating from Atlanta and Chicago-Rockford to Frankfurt & Munich, as well as from Indianapolis to Luxembourg. They offer DB Schenker customers a stable & secure access to capacity in what continues to be a volatile market situation.

USA – Asia (excluding China)

→ Capacity remains tight but manageable on most trade lanes with the strongest capacity challenges remaining with movements to Australia, Singapore and India. DB Schenker has in place large, blocked space agreements on multiple flights per week from ORD to Australia. To India as part of its own controlled flight network there are connections via our European operations to BOM and MAA. As well two times a week we have flight operations ORD / RFD to Korea (ICN), that continues to China (PVG).

USA (exports to) – China

→ No capacity constraints for the most part to destinations in China. Exception being PVG, where capacity is tight. DB Schenker introduction of the own controlled flight network from ORD / RFD to PVG, 2x per week, providing a secure option to that market and surrounding cities.

USA – Latin Am / Latin Am to Europe and APAC

→ Intra-Americas: Market demand has grown significantly with access to capacity becoming tight as freighter carriers are reducing scheduled flights, and passenger flights continue to be well below pre-COVID-19 levels. This situation is affecting all countries in central and South America with cargo movements intra-Latin America as well as into the USA and Europe and beyond.

USA / Latin Am to Middle East / Africa

→ South Africa with continued strong market demand and shortage of capacity.

  • Global

(Apr 13, 2021) - The global market supply and demand graph for 2021 shows an imbalance in favor of the demand of about 3 - 3.5%. This means that rate levels will not reduce significantly over the next months but remain stable or will move up. The market demand receives additional pressure from very positive growth numbers during Q1 / 2021 especially out of Asia as well as reduced supply (vessel capacity) as a consequence of the Suez blockage (impacting trades to / from Asia and Europe and all sub-trades in between, including Asia to / from US East Coast).

All trades generally have been reported with a strong outlook for April and May and ongoing high market demand going into the upcoming peak season. Some smaller trades ex APAC even report a strong outlook until Golden Week (in Oct). Given this strong outlook, it was predicted that equipment availability would become a crucial bottleneck, potentially impacting again increases in the spot market.

The consequences from the Suez blockage add further constraints to the already stretched supply chain: schedules will be further delayed, leading to continued congestion in ports, terminals and infrastructure. A first wave will be visible in Europe towards the end of this week. Carriers review daily port rotations and equipment supply forecast to adjust berth windows or call out sudden port omissions.

Though some sliding and port omissions or service mergers are applied, it is expected that it will take approximately 2 - 3 months to “normalize” the schedule as the waves continue. In April itself, up to 2 / 3 of sailings are missed ex APAC to the West, this translates into severe cuts in the weekly allocation as there is no spare capacity to fill the gap.

Equipment supply in APAC was foreseen as especially tight during the month of April. This becomes very serious because a significant pool of empty containers caught north of Suez is being delayed into Asia.

The overriding consequence to this will be reflected in rising rate levels in all main trades and shippers looking to ensure equipment and space.

The blockage causes a significant delay at destinations. Equipment is expected to be extraordinary tight in both regions, also vessel capacity will be impacted significantly; effectively there will be 1 - 2 ships missing per loop. This will become very visible over the next 6 to 8 weeks. At the same time, we foresee massive congestion in ports and terminals when the ships arrive at destination at the same time as well bottleneck with truck / rail / barge power. As a result, rates will be impacted, especially on the long-term agreements.

We strongly recommend most accurate forecasts for allocation planning.

Career Capacity Development 1-12/2020

Schedule quality has been further impacted in February and will continue to decline.

With fuel prices on the rise for IFO380 as well as VLSFO, the bunker adjustment factors have come into play from April onwards and causes rates to reflect related increases.

Import free time in all markets is generally cut down to zero since beginning of the year. The current circumstances make it very important for our customers to plan volume forecast (we advise 4 to 8 weeks in advance) and be flexible to re-route cargo (for congested destinations). Please expect the situation on all trades subject to continuous changes.

With an uncertain outlook on vessel utilizations and partly huge impacts on port terminals, we need to prepare for changing schedules and transit times, sudden / unexpected delays in uplift, increased bottlenecks of equipment availability, inconsistent departures and sudden surcharges possibly resulting in higher costs for the supply chain.

Our experts in Ocean will support and guide for

→ SchenkerOcean strategic carrier partnerships to ensure access to equipment and space on all trades.
Volume forecast and allocation planning: through access to volumes on all alliances and consultative volume planning (allocation match based on customer forecast) we ensure proper prioritization.
Conversion from SchenkerOcean FCL to LCL to ensure uplift of faster required part loads.
Resilient and sustainable shipping possibilities through mixed SchenkerOcean carrier portfolio.
→ Various cargo storage options (using own or contracted warehouses and store goods accordingly to ease the rush of cargo at the same time).
→ Use of inhouse options for airfreight, rail freight and combined modes of transport options.
→ Alternate FCL shipping options via breakbulk (on multipurpose vessels) or via LCL.

  • Europe

(Apr 13, 2021) - All European Ocean Freight Branches are fully functioning operationally.

  • Asia Pacific 

(Apr 13, 2021) - Notwithstanding the market situation as highlighted within Global Ocean Freight section, there are no significant COVID-19 impacted operations as status remains unchanged.

Some countries in the region are reporting recent recurring waves of infections (such as India, the Philippines, Thailand, South Korea, Japan) with targeted lockdowns and emergency measures being triggered. Some impact or delays may be expected. Our Ocean operations continue to be available to support customer needs. Delays could be expected in customs clearance and transportation. Stop-gap measures will be deployed where necessary.

→ Alternatives to move / transport cargo via other gateways / routes are being established. The ripple effect from the ‘Ever Given - Suez Canal’ incident is expected to have a prolonged impact on schedules and availability in Asia, over and above current challenges in the market. Do reach out to your respective DB Schenker representatives for support or solutions where required.

  • Middle East/Africa 

(Apr 13, 2021) - DB Schenker is fully operational and available to manage the current demand from customers even though an equipment shortage has been seen in the region.

→ Please get in touch with your DB Schenker Account Manager for the latest rates.

  • Americas 

(Apr 13, 2021) - On the exports ex NORAM, it is worthwhile to mention that especially to Asia, the vessel utilization remains strong with no inflation of market rates expected. Void sailings and service suspensions causing severe shortage of space on all North American gateways resulting in high vessel utilization factors across the board. Roll-overs and yield management are being applied by carriers. Extra loaders deployed and services being reinstated on ad-hoc basis. Asia to North America is peaking further and bookings Asia to South America have come up massively during the past two weeks. We continue to monitor the situation.

  • Global

(Apr 13, 2021) - Europe Land is fully operational and available for business, managing existing COVID-19 constraints re-established in many European countries. Asia gives a heterogeneous picture with most countries fully operational and available for business while a few countries (such as India) are facing challenges, however operating. Asia Landbridge (China to South East Asia) as well as Eurasia Landbridge (China – Europe Train) are fully operating, although facing congestions. Land operations in the Americas are also showing constraints, but still working close to normal.

  • Europe 

(Apr 13, 2021) - General restrictions to contain the COVID-19 pandemic are continuing to be in place in several European countries and are in parts directly or indirectly affecting the transportation of goods. Currently, DB Schenker Land Transport monitors and reacts especially to border situations due to regulations imposed by Germany. For any potential cases of disruptive conditions, we follow our pre-defined contingency plans to ensure flows of cargo as much as possible. In addition, we are adapting our transport service offerings daily to the needs of our customers.

Europe Land Transport Heatmap Graphic
© DB Schenker

Are you up-scaling or down-scaling your business activity in response to the changing market environment? DB Schenker Landtransport is your partner with one of the strongest and most resilient networks across 40 countries in Europe. Moreover, with our digital channels like connect4Land we offer a 24/7 entry point to our transport services, easy to use from everywhere, every time – Click. Ship. Done.

  • Asia Pacific 

(Apr 13, 2021) - Our Domestic Land product continues unabated to provide our regular high level of service.

Our Asia Landbridge FTL / LTL road service is running to schedule.

However, border congestion due to high market demand can add between 1 and 3 days to Asia Landbridge. A global demand for containers due to Ocean and Air capacity constraints continues to put significant pressure on road assets across the region. We are also still seeing the after-effects of the Suez Canal blockage and expect this to continue until the end of April. DB Schenker staff at Asia Landbridge border offices continues to ensure lead-times are minimized and service levels maintained through “triage” prioritization. Additional labor and associated domicile costs are still required to strategically avoid lengthy quarantine periods for our international drivers. A recent announcement from Savannakhét Provincial Governor mandates testing of Drivers crossing this area (at the Thai-Lao border). Therefore, additional costs are likely to be imposed on shipments traversing Savannakhét for the foreseeable future.

Our Domestic and International road services continue to meet the high market demand and are strategically positioned to meet the forecast demand spike associated with ongoing reduced Ocean freight and Airfreight capacity. However, customers are strongly urged to coordinate any volume spikes with their DB Schenker Account Manager as early as possible.

Congestion levels continue to fluctuate on our Eurasia service for Rail and Road. Please refer to table 1.

Low < 3 days, Medium > 3 days, High > 5 days, Extreme > 7 days

Forecast transit time (CY - CY) westbound is 18 to 25 days and eastbound 22 to 28 days.

Table showing the Westbound ETD delay and border congestion delay risks
© DB Schenker

Westbound container stocks remain low and are contributing to delays.

Unfortunately, additional costs relating to disinfecting cargo will be imposed upon the relevant freight payer or consignee for all eastbound shipments.

We therefore recommend checking estimated lead-times with your DB Schenker Account Manager.

  • Middle East/Africa 

(Mar 30, 2021) - Land transportation may be delayed in some countries due to additional checking. In some parts of the GCC, cargo movement has been restricted to food and essential items.

→ Please get in touch with your DB Schenker Account Manager for more details.

  • Americas

(Apr 13, 2021) -

→ USA: Fully operational.
→ Brazil: Market is running in normal conditions. No government lockdowns as of this moment; we are closely monitoring the country situation.
→ Mexico: 100% fully operational. 
→ Canada: Fully operational. 

  • Global

(Apr 13, 2021) - Our operations and customer services remain stable. No change in prioritizing protection of our staff and keeping our customers’ businesses running with dedicated guidelines and preventive measures, e.g. social distancing, wearing masks, temperature control, sanitizing stations and respective controlling of health and safety regulations.

With our global healthcare quality framework, including regional and local competence centers, we support companies and institutions around the globe with handling of PPE and medical devices, successful distribution and administration of COVID-19 vaccines.

For short term support we keep up our customer service offering:

→ In case you need temporary space, reach out to your DB Schenker Account Manager or local contact person!

  • Europe 

(Apr 13, 2021) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.

  • Asia Pacific 

(Apr 13, 2021) - There is no significant change in status for APAC countries generally from previous updates. Some countries in the region are reporting recent recurring waves of infections (such as India, the Philippines, Thailand, South Korea, Japan) with targeted lockdowns and emergency measures being triggered. Some impact or delays may be expected. Tight controls remain in APAC countries with varying measures calibrated to the respective local situations. We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.

→ For India, there have been no significant operational updates. Please refer to our India website for detailed information via download.

While governmental imposed restrictions in APAC countries continue at varying levels, our service levels so far are maintained with our CL operations available to support customer needs.

Delays may be expected due to availability of workforce and enhanced strictly enforced hygiene and monitoring SOPs. Customers may contact the respective DB Schenker representatives for further support if necessary.

  •  Middle East/Africa 

(Apr 13, 2021) - All DB Schenker contract logistics facilities in MEA are operational as per the appropriate health and safety standards and other regulations levied by the local government.

  • Americas 

(Apr 13, 2021) - While observing COVID-19 infections across the region, our warehouses continue to operate with precautionary measures in place for the health of our people and hence keeping up our customer services.

→ USA: All operations in the USA remain operational with precautionary measures in place for the health of our people and delivery of services to our clients. We are seeing increasing cases of COVID-19 in the USA and remain very robust in our safety measures and protocols.
→ Mexico: COVID-19 numbers are increasing in Mexico. Some states do require partial shutdowns of private life and economy in particular on weekends. We are doing everything possible to minimize the impact to our personnel and facilities.
→ Canada: Expanded lock down measures Province of Ontario and Quebec. All Contract Logistics sites in Canada remain operational with health and safety measures in place for the safety of our associates and continued service.

DB Schenker Organizational Update

DB Schenker is closely monitoring the COVID-19 situation. With precautionary measures in place, we are aiming to maintain full operability across all DB Schenker operations. In our offices across all continents, we have taken action to enable as many employees as possible to work from home to support the social distancing guidelines put in place by public authorities.

The next customer advisory will be the April 27 release or earlier should there be significant developments. Visit our website in advance to be among the first informed.

Thank you for your patience and support.
DB Schenker COVID-19 Customer Advisory Team

COVID-19 Customer Advisory Global Update – March 30, 2021

COVID-19 Customer Advisory Global Update – March 16, 2021

We have used our utmost care in providing the information above. While the information above has been provided to the best of our knowledge and ability, the DB Schenker Group does not assume any liabilities arising from this information of the use thereof.