February 19, 2020
Factories and freight facilities throughout China are cautiously opening as authorities continue to grapple with the deadly outbreak of the Wuhan Coronavirus, but uncertainty remains about when production will return to normal. Production lines remain eerily silent due to labor and raw material shortages. Output has been constrained because travel restrictions and quarantines have prevented many people from returning to their jobs, and offices have had to apply for government permits and undergo inspections before they are allowed to reopen, leaving parts in short supply.
Trucking is facing a driver shortage due to transport restrictions and health regulations aimed at containing the spread of the Coronavirus. Drivers who traveled outside the city where they work over the Lunar New Year holiday face a 14-day quarantine, and all drivers must obtain a government-issued permit in order to return to work. Regulations differ between cities in the same province, with some restricting drivers from going to a neighboring city.
According to the World Health Organization (WHO), the number of confirmed cases of the Wuhan Coronavirus in China has climbed to 74,279, and the death toll has risen to 2,009. The significant rise in the number of cases over the past week may bring uncertainty to the expectation of policy relaxation.
Manufacturing and Drayage Recovery
North China (Beijing, Qingdao, Tianjin, Dalian)
Manufacturing and drayage recovery is better than any other area in China, and operations are expected to return to normal next week.
East China (Zhejiang, Ningbo, Jiangsu, Nanjing, Shanghai)
Some areas, especially Zhejiang, were hit hard by the Coronavirus outbreak. While some factories have been allowed to reopen, productivity output remains low due to labor and raw material shortages. Drayage continues to be a major problem, and drayage costs will most likely face a significant increase.
South China (Shenzhen, Xiamen, Fuzhou)
Major cities in South China were especially hard hit by the virus. It is anticipated that it will be another week before the situation improves. Drayage is recovering very slowly.
Wuhan, Hubei Province
The Chinese government has gathered the national power to save Wuhan. There is a long way to go before Wuhan will resume to normal.
| Origin | Manufacturing Recovery Rate | Drayage Recovery Rate | Comments |
| Shanghai | 60% | 35% | Drayage cost is 30-50% higher than normal. |
| Ningbo | 50% | 30% | Drayage providers cannot reopen until they receive permission from the government. |
| Jiangsu | 50% | 20% | Drayage providers cannot reopen until they receive permission from the government. |
| Qingdao | 70% | 30% | No trans-city service will be allowed. |
| Tianjin | 45% | 25% | No trans-city service will be allowed. |
| Dalian | 90% | 60% | No trans-city service will be allowed.
Employees need to register daily in order to report to work. |
| Shenzhen | 50% | 15% | Drayage providers cannot reopen until they receive permission from the government. |
| Xiamen | 70% | 35% | No trans-city service will be allowed. The local government is limiting the number of staff allowed to work. |
| Fuzhou | 70% | 35% | No trans-city service will be allowed. Employees need to register daily in order to report to work. |
Cargo Operations
| Origin | Trucking | Customs | Carriers | Ports | Airport Terminals |
| Shanghai | Many drivers are unable to get back to work. It is anticipated most trucking companies will be 50-70% operational by mid-March. Some areas require pre-registration and government permission to enter. | Normal operation. | Maersk has cancelled all port calls to China until the end of February. Other carriers anticipate resuming full operation starting February 17. | The port is open for operation with limited staffing. Drayage has been affected due to the shortage of workforce. No Reefer plugs are available and reefer cargo is being diverted to other ports. Many carriers are adding Reefer surcharges of $1,000-$2,000 per container until March 13. | Open for normal operation, although many airlines have cancelled or suspended flights to Mainland China until the end of March. American and United Airlines have suspended service to China and Hong Kong until late April. |
| Nanjing | Transportation capacity is only about 5% as many drivers cannot return to Nanjing. Only local trailer service can be provided. | Not fully staffed. | Carriers are still waiting on local government approval to resume operations. | The port is open for operation with limited staffing. Drayage has been affected due to the shortage of workforce. | Same as above. |
| Qingdao | Many drivers are unable to get back to work. It is anticipated most trucking companies will be 50-70% operational by mid-March | Normal operation. | Maersk has cancelled all port calls to China until the end of February. ONE and HMM will resume operations on February 24. Other carriers are open for shift duty only. | The port is open for operation with limited staffing. Drayage has been affected due to the shortage of workforce. | N/A |
| Tianjin | Only local trailer drivers are available to work. Drivers are restricted to only take short trips within the province. | Normal operation. | Same as above | The port is open, with limited staffing. Manufacturers in the industrial park are still restricted from in/out for truckers, and have to deliver the goods to the port themselves. No Reefer plugs are available and reefer cargo is being diverted to other ports. Many carriers are adding Reefer surcharges of $1,000-$2,00 per container until March 13. | Open for normal operation, although many airlines have cancelled or suspended flights to Mainland China until the end of March. American and United Airlines have suspended service to China and Hong Kong until late April. |
| Dalian | Trailer capacity can meet basic shipping needs. | Not fully staffed. | Maersk has cancelled all port calls to China until the end of February. Other carriers have resumed normal operation. | The port is open for operation with limited staffing. Drayage has been affected due to the shortage of workforce. | Same as above. |
| Chongqing | Same as above. | Normal operation. | Same as above. | The port is open for operation with limited staffing. Drayage has been affected due to the shortage of workforce. | Same as above. |
| Ningbo | While some trucking companies have been approved to reopen, trailer capacity is <10% due to road closures and the lack of available drivers. Drivers require special permit to operate and are restricted from entering high risk areas, including Wenzhou, Taizhou, and Cixi. | Normal operation. | Maersk has cancelled all port calls to China until the end of February. Other carriers anticipate resuming full operation starting February 17. | Most container terminals have been open since February 12, with limited workforce. The efficiency of container pickup has been affected. No Reefer plugs are available and reefer cargo is being diverted to other ports. Many carriers are adding Reefer surcharges of $1,000-$2,000 per container until March 13. | Same as above. |
| Xiamen | <30% of trailer drivers are currently working. Xiamen has implemented entry control, so many drivers cannot return to the area to work. | Normal operation. | Same as above. | The wharf is open, but there is a severe shortage of labor. | Same as above. |
| Shenzhen | Trailers have not received approval for work resumption. | Normal operation. | Same as above. | Wharf operation efficiency has recovered to about 70%. | Same as above. |
Severe Disruptions to Trucking Services
Over 90% of the truck drivers at each port are migrant workers, and most return to their hometowns during the Lunar New Year. The return trip for these drivers is limited as local governments are not likely to issue timely health certificates, which are required when taking bus, and many drivers are still being confined to their hometowns. The truck driver shortage is not expected to ease until mid-March.
The Hubei province has been designated as a forbidden area, and Zhejiang, Anhui, Henan, Hunan, Guangdong and Jiangxi are restricted areas. At present, there are varying restrictions for trucks and drivers from these seven regions.
Inspection stations will be reviewing the truck’s GPS system and/or the driver’s mobile phone to ensure that they have not visited the seven restricted areas (listed above) in the past 14 days. As a result, trucking companies are cautious about taking any business from these areas for fear of being quarantined upon their return.
Jiangsu, Zhejiang and some other regions are requiring a temporary access license in order to pre-confirm the driver and truck two days in advance. No extra road pass is required for trucks from Beijing (some parts of the highway are closed), Shanghai, Guangdong, Hunan, Gansu, Liaoning, Inner Mongolia, Shanxi, Sichuan, Tianjin, and Yunnan, but drivers will be required to have their body temperatures checked at Inspection stations in an effort to curb the spread of the virus. Road pass is required for trucks in Jiangsu (limited to seven restricted provinces), Zhejiang, Chongqing, Shandong, Fujian, Henan, Guangxi, Guizhou, Hebei, Heilongjiang, and Xinjiang. No access is allowed in Anhui, Jilin, Jiangxi, and Shaanxi.
