Companies struggle to deliver supplies worldwide

Cargo carriers are struggling to deliver goods by land, sea or air, while the coronavirus pandemic forces Western governments to impose blockages, threatening the supply of vital products, including medicines, to the most affected areas, such as Italy.

While China's draconian measures to prevent the virus from spreading now allow its economy to go back online, supply chains are recovering in other parts of the world.

Problems ranging from finding enough truck drivers to restrictions on seafarers and a lack of airfreight are affecting the smooth flow of goods, freight logistics operators say.

Stocks and panic buying by consumers are also raising tensions.

“The disruption of the supply chain has moved quickly from east to west,” said Mohammed Esa, Europe's commercial director for the global logistics group Agility.

Companies involved in freight transport say the impact is being felt most strongly in air transport, as more airlines shut down services, increasing difficulties with the transport of important goods, such as medicines and perishable food.

"What you can normally move in two or three days will take twice as long - you still need to go through the airport, put it in a truck and cross the borders," said Esa.

A European supplier of active pharmaceutical ingredients used by the industry, who declined to be named, said the company was struggling to get supplies transported by air.

The US decision to ban foreign visitors also cut about 85% of the U.S. air freight capacity, as large quantities of goods were transported in the bellies of passenger planes that are now grounded. This is increasing the cost of freight five times, as space for other cargo is limited, say companies directly involved in trade.

European goods are being re-routed through places like Mexico and Canada to the United States, the companies say, but that adds time and also comes at a price.

"We have now seen the cost of direct services from Europe to the United States in the range of 5 to 10 euros per kilo, compared to less than 1 euro under normal conditions," said Jochen Freese, commercial director for Hellmann Worldwide, based in Germany. Logistics.

“It is a considerable increase and I am sure that some will no longer fly at the moment and divert to sea freight due to the cost. As logistics providers, we cannot afford the cost difference ”.

Transport across land borders is also declining, especially to and from European countries most affected by the virus, such as Italy.

“The sector is struggling to get drivers willing to drive to Italy and collect goods. It is also getting difficult to pick up cargo, because there are no employees at the factories to deliver the cargo, ”said Freese, of Hellmann.

“We saw additional cargo risk costs, which means higher payments to drivers to ensure sufficient transport capacity. I am sure that we will see these costs increase. "

Highlighting some of the practical challenges, Spanish truck driver Oscar Prieto said that drivers were having trouble getting food and using toilets or showers on the road, as service stations do not want to serve them.

When they arrive at warehouses or factories, they also cannot enter the premises and must wait outside while the paperwork is completed.

"They treat truck drivers like dogs in some places," said the 48-year-old man, who has worked as a freight transporter for more than two decades.

Locks become problem

Guido Nicolini, president of the Italian Confederation of Transport and Logistics Confetra, said that its members had problems at some borders, such as Austria, because border controls have reduced traffic and drivers have only limited time in some countries.

"We could face new problems due to unilateral actions by some countries, which could eventually lead to a shortage of supplies," said Nicolini.

While truck drivers in Spain are managing to deliver goods such as food and medicine, there are more lines at border crossings, said Dulse Diaz, a spokesman for the Spanish Confederation of Goods Transporters.

“Perhaps the most worrying problem is the fact that we don't have enough masks and gloves for all drivers. Although many companies foresaw this situation and placed orders, now all production is destined for hospitals, ”he said.

Luis Marin, manager of Asociafruit, which represents producers and exporters of fruits, vegetables, flowers and plants in the Spanish region of Andalusia, in southern Spain, said that the transporters are already passing on costs to farmers for travel.

"We usually send a truck of, say, oranges to Germany and the truck driver comes back with another load of anything, from ... household goods to chairs to compensate for the return trip," said Marin.

”But production in many sectors has dried up absolutely. Therefore, there is no return charge. If the producer has to pay for the round trip, the costs increase. "

Patrick Hasani, team leader for British digital freight forwarder Zencargo, said the stock of goods by British consumers is requiring an extra 35% capacity in European Union deliveries to meet demand.

"Delivery times are also affected, with an extra delay of up to one day for products coming from Poland, Germany and France, due to interruptions and traffic, as the health and cargo of drivers are subject to scrutiny at the border", said Hasani.

In sea freight, there is a shortage of containers - tens of thousands in Europe and the United States -, while transport lines struggle to send enough equipment after interruptions caused by the shutdown from China. The lack of ship crews is also affecting maritime supply chains.

Guy Platten, secretary general of the association of the International Navigation Chamber, which represents more than 80% of the global merchant fleet, said that ships trying to enter ports around the world were refused entry, while seafarers currently trapped on board ships were unable to return home due to difficulties in changing crew.

"Travel restrictions, border closures, air travel cancellations and quarantined ports for 14 days or more are now common," said Platten.

“We cannot ignore the fact that, without crews to man our ships, trade will cease to operate. This means that food, medicine and goods will no longer reach ports and people will be directly impacted ”.

Source: Reuters // Image credits: REUTERS / Axel Schmidt

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