International Trade Update: Coronavirus Impact

Update: Coronavirus Impact

Container ship aerial view at port

Today, February 5, 2020, it was announced that all trucks and warehouses in Shanghai and Ningbo, China are not allowed to run from today through February 9, 2020, according to the government.

The shutdown is in response to the Coronavirus outbreak. Trucks and warehouses affected are permitted to resume work on February 10, 2020. Thus, cargo cannot be loaded until February 10, 2020.

At the time of publication, trucks and warehouses in Qingdao are permitted to run but require three days of notice to order due to a labor deficit for warehouses and truck drivers. 

Additionally, it was announced today that all individuals traveling from mainland China to Hong Kong will be subject to a “compulsory” 14-day quarantine due to the spike in deaths from the Coronavirus. Hong Kong’s Chief Executive, Carrie Lam, stated that legislation preventing individuals from crossing into Hong Kong from mainland China, known as the “Prevention and Control of Disease Ordinance,” is expected to go into effect at midnight on February 8, 2020.

U.S. Coast Guard Update

Yesterday, February 4, 2020, a major carrier was advised of the following by the U.S. Coast Guard:

Sector Puget Sound is going to be implementing that all vessels that have had a Chinese port call need to have a 15-day period before entering our Captain of the Port Zone. On the 16th day, if crew members aboard the vessel have not shown any medical symptoms that could potentially be caused by the Coronavirus, the vessel may enter.

This notice has been sent in advance of an impending executive decision from the U.S. Coast Guard Headquarters in Washington, D.C., with wording to reflect the above for all U.S. ports. The notice above is expected to be issued and effective as of Sunday, February 2, 2020, at 5 PM EST.

Please be advised that vessels heading to Canadian ports and only transiting the Strait of Juan de Fuca will be permitted innocent passage as long as there is no physical contact with those in U.S. waters until the 15-day period has passed.

Ascent is working to confirm the validity of this statement with other carriers in the Port of Seattle, as well as if this will affect other major seaports.

Chinese New Year Holiday Extended

As previously reported, the Chinese government announced the extension of the Chinese New Year Holiday until February 3, 2020, in hopes of containing the outbreak of the coronavirus.

As of February 3, 2020, several more municipalities and provincial governments have announced an additional extension of the Chinese New Year Holiday through February 9, 2020, with a scheduled reopening on February 10, 2020.

Beijing, Chongqing, Shanghai, Tianjin, Anhui, Fuijan, Guangdong, Guizhou, Hebei, Henan, Heilongjiang, Hunan, Inner Mongolia, Jiangsu, Jiangxi, Jilin, Liaoning, Shandong, Shaanxi, Shanxi, Sichuan, Yunnan and Zhejiang (excluding Wenzhou) have all been extended through February 9, 2020.

The Chinese New Year Holiday is extended until February 13, 2020 for the Hubei Province (including Wuhan) and until February 17, 2020 in Wenzhou (Zhejiang Province).

At the time of publication, all ocean terminals and customs in China remain open. Beginning yesterday, February 3, 2020, many of the ocean carriers and freight forwarders started to work from home. However, it remains unknown as to when most warehouse and factory employees and truckers will be able to return to work due to the government’s suspension of cross-country traffic. Some offices have reported that they will remain closed through February 10, 2020.

When the dust settles and the extended holiday is lifted, the factory workers will be back to work, and importers and exporters should expect delays and container shortages as factories ramp back up and begin shipping cargo again. There will be many challenges, including container shortages, congestion at the terminals, increased air freight rates and an overall backup of cargo.

Please note that, in many cases, detention and demurrage free time will be granted for containers already over their standard free time conditions, inclusive of January 31, 2020 to February 9, 2020. Additionally, an extension of free time will be granted until February 9, 2020 for containers with free time ending before February 9, 2020.

We will continue to update you as we receive more information regarding the matter. As the coronavirus outbreak continues to be a rapidly moving epidemic, the situation could change at any moment. 


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