Exporters of, among other things, onions, potatoes, dairy and meat are affected by the corona virus. Hundreds of thousands of reefer containers are reportedly stuck in China. In addition, many cargoes in the Dutch ports are delayed due to the stormy weather.
Many shipping companies in the Netherlands report a shortage of reefer containers. The ports in China, on the other hand, are overcrowded. With full containers that cannot be unloaded or empty containers. “They must first be filled before they return to the Netherlands,” says Wim Waterman of Waterman Onions.
For the export company from Emmeloord, this means that some of the onions cannot go. “And while we are still in the early stages of weaning at the shipping company.” However, according to the entrepreneur, onions are generally not a priority. “The more expensive meat and frozen products are given priority.”
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The problem of limited availability of sea containers has been going on for several weeks, but is becoming increasingly felt by exporters. As long as the spread of the coronavirus cannot be stopped, the problems will continue to pile up. Fred Compeer of Kloosterboer Container Logistics can confirm this. “Many reefers are stuck in China, which means fewer containers circulate between different countries. That puts a lot of pressure on the container supply.”
Compeer expects that prices for renting reefer containers will rise due to scarcity among shipping companies. “The best paid cargo will be given priority by shipping companies to limit their financial damage. The extent to which exporters of onions, for example, are affected by this also depends on their relationship with the shipping company. A blessing in disguise for the onion and potato trade is that the export flows to West Africa are behind us. The limits of wholesaler Senegal After all, they are already closed.”
Delays due to storms
For G. Sevenhuysen vof from Warmenhuizen, the export focus is now mainly on the Far East. Co-owner Teun Paarlberg reports that he still has sufficient containers available. “There are indeed fewer containers returning from China. This sometimes means a bit of a puzzle for exporters, but we took action in time and can continue to run our programs with customers.”
What the company is struggling with are serious delays due to the storm in the Netherlands and England in recent weeks. Paarlberg: “Sea carriers apply a so-called 'cut and run policy'. Delayed ships have to unload and load quickly, leaving many containers in the port. We are experiencing delays of 7 to 14 days. This means that our customers receive their trade later and are therefore hesitant to make new purchases.”
Impact of French strikes
Compeer can confirm that. “The storm slows down sailing and transports are delayed. Much sea transport in Rotterdam does not go according to schedule. Another aspect that plays a role are the strikes in France. There were also strikes in French ports in December and January, which caused containers to move more slowly. We are talking about delays of 1 or several days.”
However, according to Compeer, the impact of this is much less significant than the coronavirus. “That concerns a much longer term and due to uncertainty about the duration of the problem you cannot plan for it. When containers are released again in China, logistics worldwide will have to restructure again. So it will certainly take some time before capacity is in order again.”
Europe is picking up
This is a setback for the onion trade, among others, which relies on logistics. At Waterman Onions they run at 70% of their normal activity during this period. “In recent weeks we sometimes even operated at half capacity, but fortunately now trade in Europe is picking up again. We are also looking for alternatives with road transport for part of our overseas exports. However, we specialize in sales to Asia and for this we are dependent on the availability of sea containers. Nevertheless, I am optimistic about the onion season. Fortunately, a lot is already gone.”
There is no doubt that other sectors are also experiencing export problems as a result of the problems in China and the available container supply. For example, Vion previously announced that meat exports are currently at an end logistic problems is being disrupted by the closure of several Chinese cities. Importers in China are cautious, which slows down exports from Europe. Also the dairy market responds to the situation surrounding the coronavirus due to uncertainty about the sales to China.
Aftermath continues for months
According to MKB-Nederland, the problems in transport and production due to the coronavirus will continue months of delay. Even if the spread of the virus is stopped in the short term.