Facing a new covid outbreak in China, Craft bets on the breadth of its scope
Covid cases in China, in what has been called the country’s largest outbreak since the appearance of Sars-Cov-2, already paralyzed part of the Shenzhen-Yantian port in June and since August 11 a Ningbo terminal, leading to the cancellation of nearly 2,000 flights on airlines such as Aerolineas Argentinas, American Airlines and Qatar Airways.
Although it reaches localized points, and in a spaced manner, the episodes are worrisome for two reasons. First, because the real extension of this new wave of Covid-19, whose main agent is the delta variant, is still unknown. Second, because in a market that already lacks space, each terminal or suspended flight represents an accumulation of cargo, or demand, for a very restricted supply of containers.
Only in Shenzhen (picture), which was quarantined for three weeks, the estimate is that the closure of the port, in June, has reduced operations by up to 70%. On the other hand, other major ports, such as Xiamen and Shanghai, face congestion.
“When one terminal closes, it overloads the others, in addition to the flow of trucks and the backyard area. These are chain effects: the stop delays the docking of a ship, the withdrawal or arrival of cargo, etc. ”Says Sadao Oshiro, LCL manager at Craft responsible for routes in Asia. “The warehouse that Craft works with in Ningbo is still open, but it is affected because it has to distribute the stopped cargo in the closed terminal.”
According to Thays Boscaine, Asia trade coordinator at LCL, the port with the highest overload at the moment is Shenzhen.
In the air, not only the new wave of covid, but also the space crisis affects major airports such as Beijing, Shanghai and Hong Kong. “In the last few weeks we had 1,800 flights canceled, from airlines that use passenger planes as freighters, in a total of 65,000 tons, an average of 50 tons per flight,” says Lorena Jorge, Procurement Manager – Airfreight South America.
The advantages of being Craft
Outside the mainland, Hong Kong is another focus of concern for the broader maritime market, but not for Craft. “The shipowners are not confirming reservations in the region. We see cases of total cancellation of reservations in August. They will probably only post reservations for September,” says Thays.
This is because most companies have Hong Kong as their hub. Craft’s differential here is having alternative routes.
“We were able to sell 800 m3 from Hong Kong. There were fourteen additional containers at the beginning of the month just to allocate this load,” says Thays, noting that Craft’s trump card in Asia lies in its strong procurement structure: negotiating freight purchases. It is a broad work front and intelligence structure in purchasing and consolidation, through the alliance with our local agent and WSL, a procurement center whose founder is Craft for thirteen years. WSL makes Craft one of the largest cargo buyers in Asia for all of Latin America.
According to Thays Boscaine, Craft looks for space on all flanks. “With this day-to-day game, we were able to save containers for Brazil and for Latam. We tried all the alternatives, because we cannot leave the load stopped ”, he says. “We have scale thanks to the space gained in supporting customers of all sizes in the market, we always treat each one as the most valuable, shipping them in high or low season. And having the broadest reach of services in Asia helps us a lot to redirect the load,” adds Sadao.
At FCL, our strength is the named contracts with a wide range of shipowners with guaranteed lease. Suppliers that we consistently support even in periods of low demand, and that today honor this, trust earned long ago until the date.
“We always study where to go and we have daily intelligence that comes directly from source to source,” says Waldan Ferreira, FCL import manager at Craft.
“Our differential is the wide menu of hubs we work with, which allows us to use airports where there are no canceled flights,” says Uruguayan Lorena Jorge. “We do not depend on the services offered by the market, we create our own paths when there is a squeeze. It is in our vein to create solutions.”
Understand the new wave in China
As in many countries, the delta variant reached China and spread rapidly. The strain has twice the transmission of other mutations of this coronavirus, according to the CDC (Centers for Disease Control), an American public health agency, and has already reached half of the 32 Chinese provinces, leading some mainly to the east and south, resuming the distancing measures and recommending the use of face shields.
The Chinese will be forced to wear face shields in places like shopping malls, cinemas, squares and parks, according to a report published by the South China Morning Post. Face protection is also making a comeback in public transport.
The restrictions are already having an impact on the economy, and analysts are reviewing the lower growth projections for the third quarter, according to the website of the Brazilian newspaper Valor Econômico.
