U.S. travel ban is expected to snarl trans-Atlantic airfreight
The U.S. 30- day ban on travel from the majority of continental Europe could have a significant impact on the movement of trans-Atlantic cargo flown on board passenger planes and as a result drive up shipping rates and limit airfreight capacity, according to industry experts.
More than 60% of the airfreight moved between Europe and the United States travels on passenger flights, which is well above the worldwide average according to cargo data provider WorldACD. This could lead to major disruptions in several industries as these shipments usually include electronics, pharmaceuticals and medical supplies.
Reduced passenger volumes will likely lead to airlines cancelling flights between Europe and the U.S. according to Brandon Fried, executive director of the Airforwarders Association, an industry group. He continued that this would lead to a squeeze capacity for “vital air cargo shipments that depend on passenger flights”.
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China denies new claims of forced labor in its factories “tainting” supply chains
A new report released by the Australian Strategic Policy Institute (ASPI) claims that the Chinese government is using forced labor in its factories, however these are claims which the Chinese government refute.
The report entitled “Uyghurs for sale” alleges the “mass transfer” of the ethnic minority to the north-west autonomous region of Xinjiang under conditions which “strongly suggest” forced labor. The report also claims that the Uyghurs are working in the technology, food, clothing and automotive industries with this forced labor being linked to the supply chains of 83 well-known global brands including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen.
While the Chinese Government strongly deny the claims made by the ASPI, the claims will pose new reputation and legal risks for companies which have supply chain links to China.
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U.S. retailers face $700 million hit from Coronavirus
It is expected that U.S. retailers will face a $700 million hit between March 9th and April 20th due to the production and transportation disruptions caused by the outbreak of coronavirus according to Patrick Hasani, chief of staff for freight forwarder Zencargo. Hasani also said that the biggest supply chain disruptions would be faced by electronics, clothing and furniture goods bound for the U.S.
The effects of the coronavirus outbreak led to an extended factory shutdown in China, travel restrictions on workers as well as cancelled and blank sailings by shipping lines, which has thrown off the movement of containers. This has resulted in a surplus of containers at the Port of Los Angeles but a shortage in Germany with Port of Los Angeles Executive Director, Gene Seroka, warning that “we’re only weeks away from a real tipping point”. However, some shipping companies are now sending vessels to retrieve empty cargo containers from Los Angeles to prevent further supply chain disruption.
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Have a nice weekend!