Postal, parcel and express operators worldwide this week stepped up emergency measures but generally kept operations going normally in most areas as the escalating coronavirus crisis posed rising risks to global supply chains.
Leading postal, parcel and express operators have all introduced special health-related protection measures for staff, especially regarding hygiene and regular hand washing, in line with WHO, international and national rules and advice. Vehicles, operational equipment and offices are being cleaned intensively.
Among the main express operators, DHL Express services remain suspended in China’s Hubei province and locked-down areas of Northern Italy. UPS and FedEx/TNT have also suspended their pick-up and delivery operations in these areas. Poste Italiane, DPD-owned BRT and GLS deliveries to closed-off areas of northern Italy have been suspended as well.
In addition, FedEx Express said in its latest update that shipments to/from China, Hong Kong and Vietnam are taking one day longer, while heavyweight shipments (above 100kgs) from Europe to China have been suspended.
In its latest Covid-19 impact report, DHL’s supply chain risk management platform Resilience360 warned about “ripple effects” on global supply chains as the crisis spreads to industrial production in other countries, notably South Korea (automotive) and northern Italy (automotive, healthcare). Production in China could still take several weeks to return to normal, it said.
Financially, the big CEP carriers are taking a hit as trade volumes out of China slump due to low production levels, and flows on other Asia routes, particular South Korea and Japan, also weaken. Deutsche Post DHL already disclosed last week that profits in February were €60 – 70 million behind target, while UPS CFO Brian Newman told an investors conference on Tuesday that “business obviously slowed”, although it was too early to quantify the financial impact. Among postal operators, SingPost announced a hiring freeze and pay cuts for top management from April to reduce costs.
The biggest financial hit, however, faces the world’s airlines which are rapidly cancelling flights in response to a slump in new bookings and a flood of cancellations. IATA warned yesterday that international airlines are heading towards dramatic losses of up to $113 billion this year from their passenger operations in the worst-case scenario.
“Many airlines are cutting capacity and taking emergency measures to reduce costs. Governments must take note. Airlines are doing their best to stay afloat as they perform the vital task of linking the world’s economies. As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times,” said Alexandre de Juniac, IATA’s Director General and CEO.
Meanwhile, large international events are being cancelled across many industries, including aviation, travel and logistics.
In Germany, next week’s LogiMAT trade fair in Stuttgart, with more than 1,600 exhibitors and 21,300 registered visitors, has been cancelled due to fears of health risks to exhibitors and visitors. Several exhibitors, including Siemens and Vanderlande, had earlier announced they were pulling out of the show.
“This is bitter, given the overwhelming importance of LogiMAT Stuttgart for the global intralogistics industry. The cancellation of LogiMAT 2020 for external, unforeseeable circumstances is unprecedented in the event’s 18-year history. Despite tremendous efforts working with Messe Stuttgart, we were unable to find a later date to host the event in 2020, so it is with great regret that we have decided to cancel LogiMAT 2020,” said Christoph Huss, Managing Partner of show organizer EUROEXPO.
