NOVEL CORONAVIRUS UPDATE and other raw materials such as fabrics from China. The challenge in the weeks and months ahead, manufacturers said, will be the flow of raw materials and

NOVEL CORONAVIRUSUPDATE

Date : March 3rd, 2020

203 March 2020 Copyright © 2020 Yusen Logistics. All rights reserved

Highlights – Mar 3 rd

China – No “resume to operation” permit is required

▪ On last Fri (Feb 27th), the Central Government issued 8 directives for local governments to follow inencouraging factories to resume operation;

▪ For enterprises without any safety issue in 2019, they can start operation on their own without anydeclaration. No on-site inspection will be done to this kind of companies until the epidemic ofcoronavirus is over;

▪ Local authorities have to provide assistance and trainings to those enterprises which can not meet theminimize safety standards;

▪ For specific production licenses that are about to expire will be extended automatically;

▪ Extend the corporate insurance covering period, or delay the insurance premium payment, so as tolessen the financial burden of enterprises.

Source : http://www.gov.cn/xinwen/2020-02/27/content_5483799.htm

http://www.gov.cn/xinwen/2020-02/27/content_5483799.htm



China – Production resumption rates▪ Production resumption rates as at Mar 1st

▪ Guizhou 100%▪ Zhejiang 99.8%▪ Jiangsu 99%▪ Anhui 98.1%▪ Shandong 98%▪ Sichuan 95.4%▪ Jiangxi 91.6%▪ Shanghai 94.5%▪ Shanxi 93.8%▪ Hunan 93.5%▪ Hebei 91.7%▪ Guangdong 90%▪ Liaoning 90%▪ Fujian 89.3%▪ Tianjin 81.3%

Source : https://news.smm.cn/news/101035172

https://news.smm.cn/news/101035172



Cambodia – China prioritizes supplying raw garment materials

▪ The Chinese officials said China is ramping up day-and-night production in all sectors and will do its best tosupply the raw materials Cambodia needs to avoid job losses and factory suspension. On February 26,Cambodian Prime Minister Hun Sen urged Chinese Ambassador Wang Wentian to look into the possibility ofexporting raw materials by air and sea to the Southeast Asian country in order to prevent job lossesresulting from a suspension in the operation of garment factories.

▪ Some factories expect delays in shipments starting this month as they are having trouble getting somecomponents and other raw materials such as fabrics from China.

Source : https://en.vietnamplus.vn/china-prioritises-supplying-raw-garment-materials-to-cambodia/169464.vnp

Indonesia – Textile makers get windfall from coronavirus outbreak

▪ Indonesian textile companies are seeing a windfall by filling orders caused by a delay in shipments fromChina due to the coronavirus outbreak.

▪ New domestic and export orders to Indonesia’s textile industry have risen by around 10% this year asfactories seek to substitute material from China.

Source : https://www.reuters.com/article/health-coronavirus-indonesia-textiles/indonesian-textile-makers-get-windfall-from-coronavirus-outbreak-idUSL3N2AS380

https://en.vietnamplus.vn/china-prioritises-supplying-raw-garment-materials-to-cambodia/169464.vnp

https://www.reuters.com/article/health-coronavirus-indonesia-textiles/indonesian-textile-makers-get-windfall-from-coronavirus-outbreak-idUSL3N2AS380



Vietnam – Factories seeing some supply delays

▪ Some factories expect delays in shipments starting this month as they are having trouble getting somecomponents and other raw materials such as fabrics from China.

▪ The challenge in the weeks and months ahead, manufacturers said, will be the flow of raw materials andcomponents from China. The availability of these materials from China could affect the export shipments inMarch.

Source : https://www.furnituretoday.com/global-sourcing/while-vietnamese-labor-stabilizes-factories-seeing-some-supply-delays/

South Korea – Offers financial aid to maritime sector

▪ South Korea’s Ministry of Oceans and Fisheries has decided to roll out financial measures to support domesticshipping firms as the escalation of coronavirus places increasing financial pressure on the industry;

▪ Under the plan, South Korea will provide around KRW90bn (US$76m) in low interest loans to local shippingfirms and each firm can apply for up to KRW5bn;

▪ Fully exempt shipping firms from port dues until their operations to China and Japan are normalized.

Source : https://splash247.com/south-korea-offers-financial-aid-to-maritime-sector-hit-by-coronavirus/

https://www.furnituretoday.com/global-sourcing/while-vietnamese-labor-stabilizes-factories-seeing-some-supply-delays/

https://splash247.com/south-korea-offers-financial-aid-to-maritime-sector-hit-by-coronavirus/


Restrictions from Vessels from China

▪ US

Non-passenger vessels are allowed to operate in the US with restrictions if they have been to China or embarkedpassengers in China within the last 14 days under the condition that there are no sick crewmembers.Any vessels with sick crewmembers are required 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 tothe date will be required 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 around14 days are also not allowed to go onshore when calling ports.

▪ Singapore

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

▪ Indonesia

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


Restrictions from Vessels from China

▪ Turkey

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

▪ Philippines

The Philippine Ports Authority said workers in ships coming from China are prohibited from disembarking toprevent the spread of the virus.

▪ South Korea

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

▪ Kenya

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

803 March 2020

Restrictions from Vessels from South - Korea

▪ Kuwait

Completely reject cargo vessels from South Korea

▪ Vietnam

Country’s capital Hai Phong City - the entire vessel will be checked by staff from Hai Phong InternationalHealth Quarantine Center, with all crew members to remain on board.


Origins Work at office Work from Home

Shanghai 40% 60%

Ningbo 45% 55%

Qingdao 45% 55%

Nanjing 40% 60%

Tianjin 20% 80%

Dalian 50% 50%

Fuzhou 20% 80%

Xiamen 20% 80%

Shenzhen 35% 65%

% of staff

Yusen Logistics Operation

Yusen China offices From Mar 2nd, below are the percentage of staff work-at-office and work-from-home

Yusen Italy and South Korea

Normal in operation and no impact on SCS shipments


Yusen Logistics Operation:CFS,Trucking,Carriers

Origin Customs Warehouse Truck Carrier Terminal

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

1/. Normal in operation2/. Majority of staff are worked from home

Terminal as normal

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


Terminals as normal

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


Terminals as normal

Ningbo Normal operation

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.

1/. MSK resume work on Mar.1st; 2/. CMA/APL/HPL/ONE resume to work on Feb.17th'3/. Others are mostly work-from-home.

Terminals as normal

Qingdao Normal operation 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 Normal operation

1/. EED (WGQ) operates as 24 hours a day. No limitation imposed on truck drivers as long as they can pass the temperature checks. 2/. DFJF (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.3/. Medlog : operating time Mon to Sat 8:30-17:00

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


Terminals congested owing to upsurge of import and reefer containers


Yusen Logistics Operation:CFS,Trucking,Carriers

Origin Customs Warehouse Truck Carrier Terminal

Tianjin Normal operationWarehouse operation is normal, 1 day reservation in advance is needed.

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


Terminals as normal

WuhanNormal operation but in low efficiency

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

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


Terminal congested due to too many empty containers

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


Terminals as normal

Italy Normal operation Normal operation Normal operation Normal in operation Terminals as normal

South Korea Normal operation 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.Source : https://www.aircargonews.net/airlines/sea-air-solutions-set-to-help-alleviate-coronavirus-capacity-crunch/

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.

https://www.aircargonews.net/airlines/sea-air-solutions-set-to-help-alleviate-coronavirus-capacity-crunch/

13Copyright © 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


Disclaimer : Yusen Logistics does not control nor guarantee the accuracy, relevance, or completeness of the information found herein. Any hyperlinks from this circular, exists for information purposes only and are meant for your convenience.

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NOVEL CORONAVIRUS UPDATE and other raw materials such as fabrics from China. The challenge in the weeks and months ahead, manufacturers said, will be the flow of raw materials and