March 30, 2021
Please find here the newest edition of our COVID-19 global customer advisory update. It has been 12 months ago that we started this report with the intention to keep you updated about the impact of the global COVID-19 pandemic on our common business. We would like to thank you for your feedback and encouragement that you have expressed over this period. We will keep updating you on a bi-weekly base and we hope that this continuous reporting will give a guidance and orientation in these difficult times.
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 SummaryAir Freight
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.
(Mar 30, 2021) – Market demand remains strong in the current airfreight market as capacity supply is limited. Airfreight capacity remains a critical enabler within global supply chains and transport mode that keeps global supply chains moving. Even though increasing cost in airfreight throughout 2020 and 2021 has added pressure to realize mode shifts, the current volatility across the ocean freight market has led to an increase in shippers’ activity in the airfreight market.
As the pandemic continues, there are only limited options for additional capacity supply as passenger demand remains low. This has led to increasing cost on passenger freighter options as a possible alternative option to ensure goods are available in the key markets since the entire cost for the flight operation has been shifted to the air cargo only. Ahead of the pandemic, most of the cargo in wide-body belly capacity was an additional revenue for airlines which now changed as cargo has become the leading role to enable passenger ghost flights to support global trade. Considering the current pandemic situation an increase in wide-body capacity is not expected to change throughout 2021 to a significant level and an improvement in the situation is forecasted more so for 2022 / 2023 whereas pre-COVID-19 levels are not expected before 2024 / 2025. A result of this will be an ongoing imbalance of demand vs supply in 2021 in the global airfreight market.
NEW!! Pilot success leads to ongoing scheduled air cargo flights from DB Schenker using Sustainable Aviation Fuel (SAF) to continue carbon emission reductions in the airfreight industry!
As shipper demand for the initial carbon neutral maiden flight from Frankfurt to Shanghai and Shanghai to Frankfurt was so successful, DB Schenker will launch a weekly scheduled freighter service from Frankfurt, Germany to Shanghai, China, and back to Frankfurt. These air cargo freighter flights utilize a Boeing 777F aircraft with allocated Sustainable Aviation Fuel (SAF) and will be available throughout the summer flight schedule from April 1 thru the end of October 2021.
Depending on your sustainability targets, DB Schenker has two models in place to achieve either a carbon zero (through in-setting) or a carbon-neutral (through off-setting) transportation of your goods. Please reach out to your local DB Schenker Team or Account Manager for more information!
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)
More detailed information on this new flight schedule can be found by clicking here.
(Mar 30, 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.
(Mar 30, 2021) - There are no updates on any impacted operations due to COVID-19, with status largely remaining unchanged.
Sporadic infections in some countries within the region underscore the prevalent risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation. Snap lockdowns were reported for Brisbane in Australia as well as in the Philippines.
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.
(Mar 30, 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.
No operational restrictions for air cargo business
Angola, Bahrain, Egypt, Kenya, Namibia, Mozambique, Oman, Qatar, South Africa, Saudi Arabia, UAE
(Mar 16, 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. Especially the ground handling situation at key major airports such as Chicago O’Hare, New York, and Los Angeles in the USA, and Buenos Aires in Argentina. These have led to delays at time of 2 - 4 days in recovering cargo in the import ground handling process. This mainly related to workforce constraints caused by COVID-19. Recent weather-related delays in the USA have now eased are not creating disruptions. 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.
(Mar 30, 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.
All trades ex APAC 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.
However, the blockage in the Suez Canal which happened on March 23, caused more than 400 vessels to queue over a period of 6 days at Suez respectively Port Said. Most ships have been on their route from Europe to Asia, Middle East, Indian Subcontinent or even Asia to the US East Coast. Since last weekend, several sailings started to take the route around Cape of Good Hope, most ships though have continued to sail with direction through the canal.
The vessel backlog should be cleared over the next 4 to 6 days; shipping lines are busy to evaluate berth windows and port rotations in Europe and Asia to recalculate the schedules.
We do not see the routing via Cape of Good Hope to be continued longer, rather to follow the standard route via the Suez Canal.
The blockage causes a significant delay at destinations. Given the current lack of vessel arrivals in Europe and Asia, we expect equipment 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.
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 factor will 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 begin 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.
(Mar 30, 2021) - All European Ocean Freight Branches are fully functioning operationally.
(Mar 30, 2021) - Notwithstanding the market situation as highlighted within Global Ocean Freight section, there are no significant COVID-19 impacted operations as status remains unchanged.
COVID-19 infections remain sporadic in countries across APAC. Snap lockdowns were reported for Brisbane in Australia as well as in the Philippines. 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 impact from the ‘Ever Given - Suez Canal’ incident is expected to have a prolonged impact on schedules and availability, over and above current challenges in the market. Do reach out to your respective DB Schenker representatives for support or solutions where required.
(Mar 30, 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.
(Mar 15, 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.
(Mar 30, 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.
(Mar 30, 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.
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.
(Mar 30, 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 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. DB Schenker staff at Asia Landbridge border offices 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 in the near 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. There are delays > 10 days at CN / KZ and CN / MN; 3 - 7 days at CN / RU border and 0 at BY / PL (Mala) – refer table 1.
Low < 3 days, Medium > 3 days, High > 5 days, Extreme > 7 days
Forecast transit time (CY - CY) westbound is > 25 days and eastbound > 28 days
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.
(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.
(Mar 16, 2021) -
→ USA: Fully operational.→ Brazil: Market is running in normal conditions. No government lockdowns as of this moment.→ Mexico: 100% fully operational. Still lockdown in most of the Mexican States.→ Canada: Fully operational. Quebec is in lockdown with a curfew, and Ontario is on lockdown.
(Mar 30, 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!
(Mar 30, 2021) - All sites in our operations in Europe currently remain fully operational with precautionary measures in place for the health of workers.
(Mar 30, 2021) - There is no significant change in status for APAC countries generally from previous updates. Tight controls remain in APAC countries, with varying measures calibrated to the respective local situations. Delays may be expected. 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.
→ Snap lockdowns were reported for Brisbane in Australia as well as in the Philippines.
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.
(Mar 30, 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.
(Mar 16, 2021) - While observing increasing cases of 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 lockdown 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 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 13 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
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.
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