In the QAD Precision News Round-Up, 24 April 2020, China air cargo rates soar due to PPE demand; no tariff relief for China imports; US to suspend immigration; UN agencies issue urgent coronavirus appeal; carrier surcharges explained, and more.
On Monday, US President Donald Trump said that he will suspend all immigration into the US temporarily in response to the coronavirus pandemic and to protect the US workforce. According to Mr Trump, this action will protect American jobs. Millions of Americans are currently unemployed as a result of the lockdown. Furthermore, immigration into the US has largely stopped as a result of border restrictions and travel bans. These restrictions were put in place as the Covid-19 outbreak spread across the globe. For more information, please see Reuters.
Under a new ruling, the US Treasury Department and Customs and Border Protection will allow importers to delay the payment of some tariffs for up to 90 days. This applies to goods imported during March and April 2020, but excludes Section 232, Section 201 and Section 301 tariffs on Chinese goods. Furthermore, anti-dumping duties will also not be eligible. To qualify for the tariff deferral, importers must show “significant financial hardship.” For more details, please see Supply Chain Dive.
Virgin Atlantic Cargo is the first British airline to resume services to China. The airline will operate three flights a week from Heathrow to Shanghai. These flights will transport Personal Protective Equipment (PPE) and medical supplies for frontline NHS staff. At present, Virgin Atlantic has completed five flights from Shanghai for the NHS delivering 3.5 million items of PPE. This included 50 ventilators, 1.8 million face masks and 600,000 face shields. For more information, please see Post and Parcel.
The demand for PPE is causing air cargo rates from China to soar. According to figures from the TAC Index, last week air cargo rates from Shanghai to North America grew by 9.7 percent from the previous week reaching $7.69 per kg. This is the highest level recorded since the index began in March 2016. Levels from Shanghai to Europe also increased, this time by 1.6 percent last week to $8.79 per kg. For more details, please see Air Cargo News.
The heads of a number of UN agencies appealed for $350 million. The money will assist global aid centers and support those most at risk during the Covid-19 pandemic. The agencies, which include the World Health Organization (WHO) and the World Food Programme (WFP), stated the appeal was the result of cancelled flights and disrupted supply routes. The UN agencies want to ramp up staffing levels and supplies to assist areas struggling to cope with the coronavirus. The UN hopes to charter flights from Europe to transport staff to crisis areas, including the Middle East and Africa. For more information, please see UN News.
Virginia’s Center for Innovative Technology (CIT) along with UPS’s Flight Forward (UPSFF) and drone companies DroneUp and Workhorse Group have partnered to test how drones might assist medical professionals during the coronavirus outbreak. The tests, carried out in early April, collected data on how private-sector drone companies can supplement emergency response efforts as well as certain types of patient care. For more information, please see Post and Parcel.
This week, Texas Governor, Greg Abbott announced that non-essential retailers can reopen today, Friday, 24 April. Restrictions are still in place, and customers are not permitted to enter stores. In a statement, Mr Abbot stated that retailers that can provide their services through pickup, mail delivery or delivery to customers’ doorsteps can reopen. Under the guidelines, the recommended method of delivery is for the retailer to place the items in the back seat or boot of the customer’s car to reduce contact. For more details, please see Supply Chain Dive.
The global coronavirus pandemic has impacted many millions of people around the world. With all but essential stores shut, online sales have skyrocketed, particularly for items people can use in their homes, such as DIY tools, electronics and gardening equipment.
Carriers are providing an essential service in keeping supply chains moving. At the same time, social distancing guidelines can make processing orders — and getting them to the final customer — significantly more difficult.
Add to this the fact that with commercial passenger flights all but grounded, carriers have lost an important air cargo capacity. Under normal circumstances, around half of all air cargo is carried in the holds of passenger planes. While a number of major airlines have transitioned to transporting freight, the capacity is nowhere near normal levels. In order to cope with the demand and squeezed capacity, many carriers have added surcharges to their services. In this QAD Precision Report we look at these charges and how shippers can respond. Read the full report here.
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