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Corona impact on European logistics, update April 2, 2020

As most European countries have extended measures to limit the spread of the novel coronavirus, supply chains are increasingly challenged. This third weekly update (previous updates can be found here) on the continuity of European logistics summarizes recent relevant news items from Dutch sources and is complemented by the experiences of Holland International Distribution Council (HIDC) members, who are all active in European distribution.

Distribution Centers and 3PLs can continue operations
The Dutch government announced on March 31 that the current measures will stay in place until at least April 28. As logistics and distribution have been designated vital processes, employees can go to work if they are needed in the operation. Third party logistics (3PL) companies are fully operational and have implemented precautionary measures such as no-visitor policies, separation between warehouse and transport activities, strict hygiene guidelines and adjustments in routing and warehouse layout to ensure compliance with the recommended 1.5 meter distance between employees.

This is a challenge, mostly for e-fulfilment specialists, as they are coping with a 30-50% demand increase in certain product categories, such as personal care, food and entertainment. They have less trouble finding flex workers to scale up, as other categories are down 50-90%, such as automotive and brick and mortar retail distribution. Regional organisations in Dutch logistics ‘hot spots’ are helping logistics companies with overcapacity connect to those who need additional capacity, logistiek.nl reports.

Air cargo volume and frequency going up
Nieuwsblad Transport reports that Amsterdam Airport Schiphol is handling about 360 weekly cargo services, compared to 260 in February (planned arrivals/departures shown here), which represents a  40% increase. Qatar Airways, one of the largest cargo airlines in the world, just announced it will add 25 weekly services to the Netherlands (from 9 to 34 cargo aircraft per week to Amsterdam and Maastricht Aachen Airport). Rates are still 3 to 5 times higher than normal as demand outpaces supply, but this might change if consumer and industry demand goes down. Airlines are becoming creative as they are increasingly using passenger aircraft for cargo to be able to meet short-term demand. Air France KLM Cargo shows the schedule of their ‘skeleton network’ on their dedicated corona website and is offering charters of passenger aircraft for belly cargo.

Ocean shipping not impeded by outbreak
The Port of Rotterdam reported on March 31 that “the number of sea-going and inland vessels calling on the port doesn’t appear to have fallen due to the corona crisis: over the past week, it has been business as usual in the port in terms of container ships, tankers and inland vessels”. Many shippers and logistics companies are reporting that after a 6 to 8 week production stop due to the covid-19 outbreak in China, product is now on the vessel to Europe after factories have come back online. Last weekend, rail freight service between Wuhan and Europe was also resumed, Nieuwsblad Transport reports.

Dutch customs offering relief to entrepreneurs and protective gear imports
The Dutch customs authorities have designed a set of measures to assist entrepreneurs who are not able to meet customs-related obligations due to the crisis. They offer flexibility in filing deadlines and temporary deferment of payments, tailor-made to the specific case of the entrepreneur. Donated personal protective equipment is temporarily exempt from customs duties on import.

Uncertainty in European delivery
The ‘Green lanes’ policy seems to be working with largely unhindered movement of goods across internal border in Western Europe. Some Eastern European countries still perform thorough border controls resulting in hour-long queues. As a result, delivery times in Eastern Europe can be uncertain. Up-to-date border waiting times can be found on this interactive map by Sixfold. The strict lockdown in some areas in Southern Europe has caused closures of many non-essential businesses, so it is important to check ahead if delivery is possible.

HIDC open for questions
The Holland International Distribution Council consists of 300 logistics companies, ranging from 3rd party logistics companies to all types of services providers to the logistics industry, such as temporary workforce providers, legal providers, VAT/tax specialists and consultants. We are ready to connect supply and demand for logistic services in Europe. Please contact us for further information.

April 2nd 2020

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Stan de Caluwe

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