Currently, COVID-19 is shaking the world, but the impact is beginning to appear in various ways among us, who work in the logistics industry in Thailand.
As a forwarder who transport the cargoes in various industries, when I visit customers, I receive various questions about the effects of Covid-19 from a logistics point of view.
Today, I would like to explain how the Covid-19 has affected logistics industry as far as I am aware as of March 13th.
Impact on logistics in China due to Covid-19
At present, the Covid-19 is spread all over the world, but when it spread from Wuhan, China, I was frequently inquired about how logistics in China looked like.
Logistics in the Wuhan area has of course stopped. Customer interests other than Wuhan are major Chinese ports such as Shanghai and Ningbo.
I received many inquiries, saying “Does the port stop in China!?”
I inquired shipping companies and our Chinese agent, then I got the answer that currently the port is NOT stopped. Outside of Wuhan area, they are working as usual.
I often heard that trucks could not be arranged near Shanghai because trucks did not go south. Recently, it is possible to arrange trucks aside from heading to the south.
Import to the Cargo from China to Thailand
Many of our customers import raw materials from China, process them in Thailand, and export them to Japan. We often hear from customers that raw materials from China are not coming in, so production volume has dropped.
So while imports from China are decreasing, some customers are switching to imports from outside China.
Change production from China to Thailand
Some companies that have factories in China and have exported from China to Japan and other countries, are shifting their production line to Thailand.
In some cases, products that cannot be produced on existing production lines are brought to Thailand from China along with the entire production line.
I’m sorry for Chinese companies, but it is lucky for us. .
Containers are staying in China because cargo does not move
Especially when I hear about Europe, the production volume from China to Europe seems to decrease because of Covid-19, so the containers also do not move to Europe and it stays in China.
Moving empty containers also take some cost, so it is now reflected in sea freight from Europe to other countries.
I heard that our sea freight from Europe has also risen by around USD200/20′.
Products cannot be sold in Japan due to Covid-19
A customer who manufactures and sells final products to Japan, says that the products have not sold the worst in the past five years.
Self-restraint of going out affects the manufacturing industry as well as the travel industry, the food and beverage industry, and the service industry as consumption slows.
If products cannot be sold, the economy will gradually slow down.
If this Covid-19 effect does not stop. Our work will be reducing…
It may affect air freight due to decreased airline flight
Thailand regulates departures to 11 specific countries, and airlines are also reducing flights. There is still no cases not to issue new visa to foreigners as in India, but they may ban the foreigners to enter the country in near future.
Not only Japanese but also people around the world do not move, so the number of flights decreases.
Airplanes carry not only people but also luggage at the same time, so supply may be reduced and air transportation costs may increase.
If production decreases and shipments decrease at the same time, this may have no effect because of supply & demand balance, but if the balance lean to the demand, air freight may increase.
Ocean freight exported from Thailand
This depends on the shipping company, but there are some shipping companies that have been kept the rate or have raised Ocean freight or LSS prices for us.
Currently, Songkran Holiday is coming in Thailand, so we don’t hear any mention that shipping companies’ services have declined, but there is a good chance that maritime transport will be affected by freight and services.
There is a relationship between shipping companies and forwarders, so it depends on the company, right?
As for the effect of the Covid-19, this is what I know at the moment.
The movement of necessities, such as for masks, is large, but the effect that people do not move also affects the international logistics industry, which moves goods due to cooling-down of consumption.
Still, each customer is taking measures and some customers are doing what they can do now. I want to do what I can while praying for an early settlement.