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Asia: COVID-19 and Ukraine Disruption

Following our most recent update on 20th January on the impact of an increase in Covid-19 cases in Asia on supply chains, please find below an update.

COVID-19

Hong Kong
Air and sea port operations continue largely as normal, with a shortage of workers having a minor impact across the ports. Daily COVID infections are now exceeding 30,000 and are expected to increase further, with related impact on further staff shortages expected.

A 10 day strict lockdown from the 17th March onwards has been proposed to allow Hong Kong residents to undergo 3 rounds of universal mandatory testing - this may cause disruption to operations.

Vietnam
Case count currently stands at 120,000. Workers have been advised to work from home where possible and due to the high infection numbers, productivity has seen some impact, however ports and factories still remain open with no further restrictions in place.

Malaysia
COVID-19 cases now stand at 30,000, with workers advised to work from home.

Similar to other parts of Asia, the ports and production facilities still remain open and no further restrictions have been imposed on these, although a shortage of workers is reducing productivity levels.

Thailand
COVID cases in Thailand are increasing but are not yet at a level where home-working is advised. Production is seeing a minor impact with some companies scaling down operations due to worker isolations. Port productivity and operations remain unproblematic at the moment, although it is expected that due to the increased case numbers, they will soon see workforce shortages and operations will slow.

 

Ukraine

Ocean

The leading shipping lines have announced suspension of new bookings for all Russian cargo. Some ports like Hamburg and Rotterdam have announced they will no longer handle any transshipment cargo to or from Russia.

Air

Due to the closure of Russian airspace, several airlines have suspended flights to China until further notice. One of the largest cargo airlines between China and Europe will no longer be able to operate due to the sanctions, which will lead to air freight rates being pushed up due to reduction of already limited capacity as a lot of rail has been switched to air.

Rail

Operations are currently not impacted by restrictions, however many forwarders have taken the decision to temporarily suspend acceptance of any new bookings as to mitigate risk of cargo being stranded in Russia with no possibility of moving it.

Road
The cross border trucking service between China and Hong Kong has been suspended by the Chinese government due to current cross-boarder and international challenges, forcing air export prices from Guangzhou and Shenzhen to increase substantially, although export prices from Hong Kong are currently unaffected.

 

If you have any questions on your Asia supply chain, please contact us here.

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