CORONAVIRUS DISEASE 2019 (COVID-19) UPDATE

May 22, 2020, 6pm (CET):

Changes compared to our status of May 19th in: "Impact on Sea Logistics" and "Impact on Road Logistics".

After four months, we are still in the midst of a global pandemic, with public health systems and national economies exploring new ways to cope with the impacts of the virus.

In these exceptional times, the logistics industry continues to play an important role for society as a whole. We take our responsibility very seriously at Kuehne + Nagel. We are thankful for the positive feedback we receive every day from customers whose supply chains we serve under difficult circumstances. This motivates everyone involved - truck drivers, warehouse workers, sea, air and road freight experts, and management - to continue to deliver on our promises.

We are  adapting our response on a daily basis. Our focus is on protecting the health and safety of our employees and ensuring our customers’ operations continue as smoothly as possible during this difficult period. We continuously provide our colleagues in sales and operations with in-depth information so that they can support our customers with the most up-to-date and relevant advice.

We will continue to update you as the situation evolves. Please do not hesitate to reach out to your local Kuehne + Nagel representative if you need more information.

HEALTH AND SAFETY MEASURES AT KUEHNE + NAGEL

The health and safety of our customers and employees remains our top priority. All Kuehne + Nagel offices have implemented actions according to recommendations from the World Health Organisation.

As regions differ in levels of locking down more or starting to open up, we are adapting our business continuity measures accordingly. The Kuehne + Nagel commitment to operating under COVID-19 circumstances include responsibility on management side to adapt sites enabling social distance, staggered work schedules, safe commuting, frequent disinfection, cleaning procedures and more.

Currently, the majority of Kuehne + Nagel office staff is successfully working from home.

In regards to risk of virus on packages and pallets we receive and deliver, we deem the risk low, following WHO statement of "The likelihood of an infected person contaminating commercial goods is low and the risk of catching the virus that causes COVID-19 from a package that has been moved, travelled, and exposed to different conditions and temperature is also low."

BUSINESS CONTINUITY PROGRAM

As a global logistics company, we are facing supply chain disruptions on a regular basis. We adapt continuously our global standards of business continuity management and test our Business Continuity Plans addressing different crisis scenarios.

They are designed to protect the safety and wellbeing of our employees and to ensure an uninterrupted service for our customers. In respect of the magnitude of the COVID-19 effect, we are executing new and continuous risk assessments, business impact analysis and implementing new measures into our business continuity framework based on alert levels.

The learnings from the activation of BCPs in China at the beginning of the crisis have helped us to make changes and improvements in all our BCPs around the world. All countries have established national response teams in order to either prepare for, or execute activation of these plans.

Where deemed appropriate by our national management teams and where required by governmental decrees, we activate preventive measures and processes, which include temperature control of employees and visitors (within the parameters set by locally applicable laws such as data protection laws), self-declarations, segregated/flexi work arrangements, options to work from home, the sanitisation of our offices and sites, and the provision of essential hygiene products at workplaces. Standard processes have also been defined in case of staff being infected or exposed to people who are infected.

We are sharing hygienic guidelines with our suppliers to ensure greater awareness within the supply chain.  Drivers arriving for collection or delivery undergo a briefing on hygienic best practices, and where permissible, are instructed to fill out self-declarations.

We have implemented global travel restrictions and external and internal meetings are either conducted as video conferences, or only in the presence of a small number of participants observing social distancing recommendations as issued by public health authorities.

GENERAL SITUATION IN OUR REGIONS

North America

An increasing number of states in the US, and provinces in Canada have taken steps to reopen businesses. Mexico recently implemented further measures to control the spread of the Coronavirus in-country. Our North America businesses units are operating efficiently in what continues to be a challenging environment with most aspects of our pandemic business continuity measures still in-place. Planning is underway for a resumption of ‘Normal’ over the next weeks and months with ongoing protective measures for employees, contractors and visitors in our offices and warehouses.

South and Central America

Several governments in South and Central America have declared “state of emergency”, establishing, among other measures, the closure of borders. Others have enacted national quarantine to prevent the spread of the virus by forcing the closure of our locations, but they continue operating remotely. Despite the challenging environment, operations continue to function.

Europe

In varying degree, our colleagues are returning to the offices and/or warehouses under strict new procedures based on local risk assessments, capabilities and governmental advice. Countries are fully operational, with some delays and alternative procedures due to governmental restrictions.

Asia Pacific

Business in China has returned to normal. Transport movements, including trucking services, are also returning to normal status. China export trade impact continues due to supply chain disruption and the closure of business and manufacturing overseas.

For the rest of Asia Pacific, due to the increasing number of confirmed cases reported, most of the local governments have stepped up their containment controls. These measures include but are not limited to 14 days self-isolation for travellers, restricted community movement and border controls. We have enacted additional health and safety measures, and activating our Business Continuity Plans where necessary and required.

Middle East and Africa

As the number of confirmed cases continues to rise, state and local authorities in the Middle East and Africa countries have called for more stringent steps to be taken for local governments and businesses. As a result, we have activated further control measures in our business continuity plans. Despite the challenging environment, all operations continue to function. 

Starting around 23rd of April, activities are also planned taking the celebration of Ramadan into account, where we do not foresee any major impact on our operations.

IMPACT ON SEA LOGISTICS

The situation in each country is evolving daily as the authorities extend or relax restrictions. Our local experts are at your full disposal to assist and support you with your specific requirements.

North America

Our sea logistics operations are fully functional with minimal impact from having to work remotely. The main CFS gateways in US are operating normally but with reduced hours. Due to decreases in vessel operations some ports or terminals have reduced operating days or hours. All Port Terminals will prioritise essential products (medical goods) movements over non-essential goods. However, cargo is still flowing into/in US and Canada.

Central South America

There are currently no major restrictions on sea logistics operations. The offices are still handling business, but with reduced staff or in home office mode. The ports are operational, but there are delays and congestion in the terminals due to reduced staff, reduced attention hours and local quarantine measures.

In Mexico, only essential cargo is allowed to be moved, but exports so far didn’t stop.

Argentina is in national quarantine. Vessel operations are normal. The cargo-gate-process is normal with delays, but giving priority to essential cargo (e.g. food, pharma, etc). The ports, customs and CFS work with skeleton staff and can only handle essential shipments accepted by customs authorities.

Bolivia and Peru also instructed general quarantine, so delivery from ports is impacted, but the operations are regular. In Chile, the government has extended the total quarantine for the Metropolitan Region, but sea logistics operations are not affected and terminals and ports are working as normal. In Columbia, Venezuela and Ecuador, operations are under normal performance.

China

Terminal, depot and CFS operations in China are back to normal. The arrival of large bulk carriers in China has returned to normal. The availability of reefer plugs at terminals in Tianjin, Shanghai and Ningbo improved.
 

South Asia

With the surge in the Coronavirus cases outside China, governments across the South East Asia region are stepping up their containment measures.

In the Philippines, Luzon (Manila), Visayas (Cebu) and Mindanao (Davao) had been placed under a state of "enhanced community quarantine". The Port of Manila and customs are operational, but with limited capacity.

The governments of Malaysia, Bangladesh and India have extended their local lock downs. Logistics is allowed to operate, but is restricted. All non-essential manufacturing, government and private business premises in the countries are not operating during this period - though the agricultural sector and other essential industries will be given special permission to open. In Malaysia, all essential services, such as ports and transportation companies, continue to run, but with limited operations. Ports in India and Bangladesh are operational, but with reduced capacity and facing severe port congestion issues. Berth schedules are disrupted in most of the terminals with no buffers. In Chittagong, vessels wait outside the port to take berth. The Terminals across India are facing severe labour shortage and high yard inventories affecting the productivity.
In Myanmar and Thailand, sea ports and terminals are working as normal. Customs release is allowed in Myanmar and more and more factories are allowed to operate again, but non-essential cargo cannot be delivered.

The Port of Singapore reports slight berthing delays.

In South Korea, sea freight logistics and overall supply chain remain stable with all trucking, customs clearance and warehousing operating as usual.

New Zealand business have now returned back to work. All cargo open for international movement.

In Sri Lanka, only essential shipments can be loaded and moved with special curfew passes. In the ports, container gate-in is still possible, but within reduced working hours.

In the other countries we see "business as usual" from a ports and carrier perspective, but with delays - due to shorter working hours in customs, CFS and ports - as well as equipment and space constraints due to blank sailings. Overall, ports are becoming congested and reefer plugs are hardly available.

Europe

Carriers continue to blank sailings by taking out up to 50% capacity on Asian as well as North American trade lanes to balance supply and demand. Few ports, e.g. Genoa, La Spezia and Livorno, still report slower gate in and out procedures due to reduced working hours to comply with COVID-19 preventive measures.

However, the situation in some European countries is beginning to stabilise and governments start to ease the strict lockdown measures that have been in place to slow down the spread of the Coronavirus. Production is slowly resuming and car manufacturers across Europe have begun to reopen their factories.
 
Middle East and Africa

Ports and terminals are operational with delays due to carriers and customs shorter working hours, preventive measures and reduced capacity. Reefer plugs become short as reefer containers keep stocking up. Ports, CFS and cargo vessels are still operating, but with precautionary measures. There is a decrease of volumes visible at all port terminals.

Turkey is facing impacts on imports and exports. Here, vessel sailings, equipment availability and carrier operations are effected. In Saudi Arabia, operations are affected by the current curfew, but ports, CFSs and customs are working with limited opening hours. Food and medicine are prioritised. In Kenya, port operations are greatly affected by social distancing regulations. However, import and export operations are not affected.

The Kuwaiti government announced a complete lockdown: All private sector companies are required to shut down, except those related to essential needs. Customs and main carriers are operating, but transport services are restricted.

South Africa has started to ease its lock-down. The export of agricultural goods is permitted, including liqueur and tobacco (raw materials). The transport of all goods from the ports of entry to the final destination is permitted. Terminals/ports still operate at reduced capacity. The berthing times of the ships in the various ports are between 1 and 5 days. 

IMPACT ON AIR LOGISTICS

North America

The travel restriction between 26 countries in Europe and the US, that became effective on March 13, and the EU restrictions effective on March 17 only apply to passenger travel. The majority of airlines announced a drastic reduction of passenger flights offering limited capacity at market rates. Since the trade lane between Europe and North America is largely dominated by passenger aircraft, we have been experiencing a severe drop in the available capacity. In reaction to evolving capacity constraints due to severe cuts in belly capacity, we see an increase in freighter capacity.

In order to contain further virus outbreak, restriction on non-essential activities was put in place in almost all of the US states and between the US and its Northern (Canadian) and Southern (Mexican) borders. These measures do not apply to trade flows and all our branches continue to operate with reduced staff or in home office mode.

The rise of cases in Canada and Mexico and EU travel restrictions are also leading to limited available capacity in the market due to the heavy reduction of passenger flights and cancellation of some freighters.
 
Europe

Our airfreight operations in Europe continue running. However, with the majority of flag carriers having closed down their passenger networks, we experience some capacity constraints to major markets. Increased congestion at airports and cargo rerouting via European hubs are effecting overall processing time and transit times of shipments. Overall, freighters are back on schedule and carriers offer additional charters on congested lanes such as Europe to the US. 

South Central America

Following border closures and lockdowns of some South American countries and the subsequent drop in demand, carriers are reducing their international operations. LATAM Airlines have drastically reduced passenger capacity whereas another main carrier, Avianca, filed for bankruptcy protection on May 11. Argentina reduced imports to essential goods only, which means that every shipment now needs to go through an additional green light procedure before shipping. The overall operational status of airports, truckers and customs is stable, and all our Air Logistics branches are operating, in most cases, partially from home.

Middle East and Africa

Capacity constraints are also seen in the Middle East and Africa region with all airlines having suspended/reduced their passenger flights on the routings into the region. National carriers Etihad Airways and Emirates have suspended all passenger flights as per the UAE government’s directive. Cargo and emergency evacuation flights are exempt from this suspension and will continue. Our operations continue running with teams working from home/operating in split setups in all countries, including countries that have imposed countrywide lockdowns.
 
Asia Pacific

The overall situation with regard to the operational status of airports, truckers and customs clearance in China have returned to normal levels. Production recovery is leading to an emerging transportation demand adding pressure on available air freight capacity. The continuing global demand of Personal Protective Equipment out of China has further increased the pressure on freighter capacity. At the moment we are seeing congestion up to two days across various airports in Greater China. In addition, China has further reduced the number of international passenger flights as part of its COVID-19 prevention and control measures. According to the Civil Aviation Administration of China (CAAC), from March 29, each Chinese airline can only operate one route to any country, with no more than one flight per week. Each foreign airline can only maintain one route to China, with the number of weekly flights reduced to one.

The Chinese government has introduced a new regulation to support the global pandemic situation more effectively and ensure the orderly export of quality medical supplies. Shippers need to provide declarations (written or electronic) that they have obtained China's medical device product registration certificates for their export shipment and that the medical supplies are compliant with the quality standards of importing countries (regions). The increased inspection rate by the Chinese customs could lead to delays in the export process of shipments.

Pressure on capacity caused by limited passenger flight activity is seen in the majority of South Asia Pacific countries. Complete lockdown in India has a direct impact on customs and terminal operations, trucking, and available capacity since all international passenger flights are suspended until 31st of May.
 
 
Overall situation

The majority of carriers closed down or made significant cuts in their passenger networks, and we see an acute shortage of lift on all trade lanes. In order to compensate for belly capacity shortages, freighter capacity has significantly increased; however, at the moment, this increase is not sufficient to offset a substantial drop in global belly capacity and an increasingly higher demand for Personal Protective Equipment.

We are working closely with our long-term carrier partners to have full transparency of the situation to address the needs and requirements of our customers. At this point, we can no longer assure lead times at their applicable rates. To the extent available, charter space will be offered at current market rates. 

Our Air Logistics teams are fully informed about the latest development of the situation, and we encourage you to reach out to your respective Kuehne + Nagel contact person for any further questions and any specific requirements regarding your airfreight shipments. 
 

Useful links

IATA's Airlines Cargo Operations Status page offers daily updated operational overview collected directly from IATA carrier members.

IMPACT ON ROAD LOGISTICS

We take this opportunity to thank our drivers, who are tirelessly collecting and delivering shipments under challenging conditions. We also extend our thanks to our customers and recipients of shipments who allow our drivers access to their restrooms. We truly appreciate those who go out of their way to help our drivers do a great job. By all of us working together and showing respect to each other, we jointly contribute to keeping our supply chains afloat.

Europe

Despite most of European countries returning gradually from exceptional situation the European overland transport market still needs to cope with governmental measures put in place. Even though our network and all our offices across Europe are operating, we experience delays at some European borders and also at collection and delivery addresses due to health and safety measures as well as other Covid-19 related safety checks. This is also having an impact on many other linked transport lanes. Even if many companies have re-opened again temporary closure of some pick-up- or collection- addresses for our network, is affecting our operations and service. Closed companies on both shipper and consignee side lead to decreased volumes in respective transport legs and the need to reduce frequencies and/or conduct reroutings. This can in certain lanes cause delays of 1-2 days.

For an indication on border waiting times please consult the publicly available information via this link https://covid-19.sixfold.com/. As we cannot verify the data nor guarantee its accuracy, this link should be used for information purposes only.

For any country in Europe, we still strongly ask shippers to check the availability and readiness of their customers to receive shipments during business hours, before handing shipments over to us. Shipments which cannot be delivered due to absent consignees will be returned to shippers at their cost. In case shippers are not able to receive these returned shipments, storage cost will apply.

In case of pick-up orders customers also need to ensure readiness of their pick-up addresses. If this is not given, cost of the pick-up attempts will be charged.

Further customers need to ensure that consignee’s will confirm receipt of cargo.

 

Asia Pacific

Overall, trucking services in China continue to recover. The operation for cross-border trucking to and from Hong Kong (SAR, China) remains normal.
 
We see an improvement in the congestion situation at the China/Vietnam border (Pingxiang border) although one to two days of delay in crossing over to Vietnam is expected. Despite an increasing congestion situation at Huu Nghi, Vietnam heading into China, we have adjusted our operations so that our trucks can enter China with no lead time increase.

With the 14-day quarantine measure imposed by the Vietnam government, we see a scarcity of (Laos and Cambodian) drivers for cross-border transportation from Vietnam into Thailand. We also expect domestic delivery delays in Vietnam due to the health check measures imposed at every province border. Although the Thailand government had imposed a partial lockdown of Bangkok, Chiang Mai and Buri Ram provinces and declared a state of emergency, the cross-border movement for commercial and essential goods between Thailand and Myanmar/Laos/Cambodia is allowed. All drivers need to undergo health checks. 
 
For cross-border trucking to Central Asian countries, China/Kazakhstan border (Horgos border) opened on March 18. We see congestion at the border due to the additional health safety measures implemented.
 
Similarly, trucking to Europe via the China/Russia route (Manzhouli border) faces slight congestion due to the increased health safety measures at the border.

The Malaysian government has extended the movement control order until June 9. Borders are opened for the movement of essential goods in and out of the country, subject to the approval of the Ministry of International Trade and Industry (MITI) of Malaysia. The Thailand/Malaysia border congestion situation has eased out.

The Indian Government has extended limited lockdown until May 31. Transportation of goods is allowed with effective from May 4, except for the containment zones listed by the Government.   

The situation and border control measures in most of these countries are evolving rapidly as the COVID-19 situation continues to change. We are closely monitoring the situation and will provide further updates on this page.
 

North America

US, Canada and Mexico border restrictions only impact "non-essential" travel and do not apply to the transportation of goods and services. Stay-at-home orders around the country are being lifted in some states and extended in others, however these measures are not directed at commercial truck traffic. Check with individual partners on their operation status prior to shipping because nearly all LTL carriers will be returning freight immediately (<1 day) after a refusal due to a closed consignee. Cargo cannot be held at the destination due to large volumes of undeliverable freight resulting in additional charges.

US domestic truckload capacity is tightening, but federal and state governments are committed to keeping the supply chain moving. The majority of LTL and Small package carriers will suspend physical signatures. In adherence to the “Social Distancing” policy, drivers will not be obtaining signatures from consignees. Drivers will record the exact time, note any exceptions and obtain the name of the person who is accepting the freight. As spot market truckload rates rise to highly affected areas, less drivers are willing to take loads into these areas forcing the ad hoc rates to climb. Urgent orders of retail goods drive rates up for van and reefer equipment. Retailers, including e-commerce outlets, rely increasingly on spot market providers to re-stock shelves immediately, while truckers report long wait times at pickup and delivery points.

ALTERNATIVE SOLUTIONS FOR SHIPMENTS

We remain committed to serving our valued customers. Besides working closely with carrier partners to provide solutions for urgent shipments, we have also activated alternative transport modes and route solutions to support your business needs.

 

AIR LOGISTICS

Charters

Working closely with our key airline partners, our Air Logistics experts maintain regular space allocations on major Asian and Translantantic routes and have established additional weekly charter rotations to service both markets for urgent supply needs. A weekly fixed operating schedule and new charter movements on high demand trade lanes will help to avoid production and supply chain delays, and ensure the continuation of your operations caused by present and future implications of the „Coronavirus“ outbreak.

Time-Critical Solutions

The impact of COVID-19 poses particular challenges for critical logistics needs in the healthcare, aviation or manufacturing industries. To expedite your deliveries, resolve transport delays and ensure the continuation of supply chain flows, Quick/Sterling, a Kuehne + Nagel company, is dedicated to offer you the time-critical solutions you need. Despite global travel restrictions, countries` lockdowns and severe capacity constraints on all trade lanes, our expert teams are committed to support you. Do you have an urgent shipment? Contact our experts in time-critical logistics.

Sea-Air Product

Kuehne + Nagel Sea-Air product, a combination of sea freight and air freight transport modes, helps to reduce costs, expedite your deliveries and ease capacity constraints whenever possible. We are operating several state-of-the-art Air freight hubs around the world to serve a large number of destinations by Sea-Air or Air-Sea in Asia, Europe and the America.

Air-Air service

When flight options become scarce, you might wish to stay in the air: With our air-air solution, your cargo flies to Dubai from where it will go up in the air again to reach its final destination. As one of the largest gateways and consolidation hubs, Dubai is the answer to the rising transportation demand while flight availability is still limited. Once the shipment arrives in Dubai, the Kuehne + Nagel air logistics team manages the inbound handling and the on-forwarding to the final destination. Supported by a network of carriers and partners, our team can find the best connection to keep your cargo flying. Reach out to us for your air-air connection: dxbair@kuehne-nagel.com.

 

SEA LOGISTICS

We offer KN Pledge for full sea container transport. It includes a guaranteed lead-time for your shipments with a money-back guarantee.

Customers can review in real-time, all available services, including regular service updates via our digital platform, seaexplorer. Seaexplorer enables customers to search for appropriate alternative service options in case of service disruptions.

Our KN LCL expedited service offers you an alternative for imports from Asia or Europe to the United States or vice versa with a faster transit time than regular LCL services: Using a direct route from the port of discharge to the customer location, which skips the inland CFS location, the Expedited Service is up to 6 days faster. For further information please contact your local Kuehne + Nagel office.

We have introduced the priority service "Reefer-Go" for time critical pharma and healthcare consignments that need to be loaded in south and central European ports according to a defined schedule. For further information, please contact your local Kuehne + Nagel reefer or pharma sea logistics team. 
 

RAIL LOGISTICS

With short transit times and low freight costs our door-to-door rail service KN Eurasia Express provides you an optimal alternative transport mode for connections between China, Russia and Europe. Kuehne + Nagel works closely with all railway companies to ensure you maximum flexibility. Weekly departures are guaranteed from major terminals in China, such as Wuhan, Chengdu, Xi’an, Suzhou and Zhengzhou to destinations across Russia, Europe and vice versa.

CUSTOMS CLEARANCE

Even though most borders in all affected countries are open for transport of goods, all shipments need special attention regarding export and import documentation.

Our customs clearance services are available and fully operational in all major regions. Customs authorities in all major regions are fully operational as well, although some ports may have delays due to reduced staffing potentially affecting inspections and other manual clearance processes.

Please see the following country specific customs websites for status updates. The situation remains fluid given the circumstances. We recommend that you regularly check for changes:

Check here for Europe, here for UK, here for USA, here for Canada and here for Mexico.

Please reach out to your Kuehne + Nagel representative for further guidance.

 

 

DISCLAIMER - All information is provided in good faith for guidance and reference purposes only. It is of a general informational nature, and Kuehne + Nagel takes no legal responsibility for the accuracy of the information provided via this document. Kuehne + Nagel makes no representation as to the accuracy or completeness of any of the information contained herein and accepts no liability for any loss arising from the use of the information provided.