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Chinese Government Extends CNY

We would like to share with you the latest information available regarding the Corona virus outbreak in China. As reported previously, the Chinese government extended the Lunar New Year holiday in an effort to reduce travel and mitigate spread of the virus. Businesses in most areas are required to remain closed until February 10th. These areas include the cities of Shanghai, Ningbo, Nanjing, Chongqing, Dalian, Fuzhou, Qingdao, Shenzhen, Tianjin, and Zhongshan. Businesses in Wuhan and the Hubei province are required to remain closed until February 14th. The closures are required, though workers may choose to work remotely.

Wuhan/Wenzhou seaports will remain closed until further notice. All other ports are open and operational at this time, with most functioning with reduced crews. On the airfreight side, most passenger air services have stopped to and from China. Airfreight shipments are currently limited to more expensive cargo-only aircraft.

The effects of this extended closure are yet unknown on the shipping industry. The main aspect of supply chains being affected is the delivery of goods to port for export; drivers are unable to return to work at this time. The government is also requiring truckers to prioritize jobs for medical and daily consumption commodities. This restriction will strongly limit available trucks for normal business operations.

The resulting lack of demand at ports is expected to cause additional blank sailings over the next few months as operations return to normal. These blank sailings are likely to keep market rates stable for the time being; significant reductions or increases are not expected at this time. However, the situation may change in 6-8 weeks, when the surging of backlogged ocean containers may cause vessel space shortage.

Under these unusual circumstances, shippers are encouraged to be flexible with their usual transportation operations. Although unexpected cargo deviations, quarantines, or delays may occur, OTS will work to mitigate these effects on our customers.

We will continue to monitor the situation and update our customers accordingly. Please contact your OTS Sales representative with any questions.