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Covid-19 update Wednesday 8th April
The UK and US continue to grab most of the global headlines - the UK due to the plight of its prime minister Boris Johnson (the TLDR there is that he’s still in intensive care, his condition is unchanged). The US is grabbing the headlines because of the sheer volume of cases / deaths in the country plus also for some of the quotes being given and actions being taken by President Trump.
Today’s round up is Guardian heavy. Sorry if you’re not a fan of them, I was pushed for time.
Virus news in depth
Coronavirus: UK will have Europe's worst death toll, says study - If you’re British like me this is rather frightening; the Guardian reports (Link) that “world-leading disease data analysts” (their phrase not mine) have projected that the UK will become the country worst hit by the coronavirus pandemic in Europe, accounting for more than 40% of total deaths across the continent. The Institute for Health Metrics and Evaluation (IHME) in Seattle predicts 66,000 UK deaths from Covid-19 by August, with a peak of nearly 3,000 a day, based on a steep climb in daily deaths early in the outbreak. The analysts also claim discussions over “herd immunity” led to a delay in the UK introducing physical distancing measures, which were brought in from 23 March in England when the coronavirus daily death toll was 54. Portugal, by comparison, had just one confirmed death when distancing measures were imposed. The IHME modelling forecasts that by 4 August the UK will see a total of 66,314 deaths. Spain is projected to have 19,209 deaths by the same date, Italy 20,300 and France 15,058. All three countries have imposed tougher lockdown measures than the UK. (Personal note for fellow Brits, 66k = a town the size of Paignton in Devon, Rochester in Kent, Loughborough in Leicestershire, Dewsbury in W Yorks or Washington in Tyne and Wear. I expect we will hear a lot more about this herd immunity and in particular Dominic Cummings once the pandemic ebbs away; Cummings will probably be thrown under the bus for it).
Fears of crisis in global car finance markets as owners seek payments help - Fears are growing of a crisis in the UK’s £75bn car loan market, where 6.5m vehicles have been financed through leasing deals with monthly payments that are already proving unaffordable for some laid-off as a result of the coronavirus says the Guardian (link). The Finance and Leasing Association (FLA), which represents the credit arms of the car manufacturers as well as the banks, said: “It’s early days in terms of quantifying the impact on arrears, but the number of forbearance requests has grown significantly in recent weeks.” Britain’s car market rests on billions in debt taken out by consumers, many of whom may now struggle to pay. Around nine out of 10 of the 2.3m new cars sold in a typical year in Britain are paid for using some sort of financing provided by an FLA member. The most common purchase method has been personal contract plans (PCP), where a buyer puts down a deposit and then rents the vehicle for two to three years at a monthly cost, typically around £250. Problems in the UK car loans market may pale into insignificance compared with the colossal scale of auto lending in the US, which totals $1.3tn (£1tn). Some of it has been securitised into bonds that bear echoes of “subprime” lending common before the financial crisis of 2007-08. Around $30bn of new subprime vehicle loans were issued in 2019, and there have been reports of some lenders verifying the income of just 8% of borrowers – whose loans are then bundled into bonds sold on Wall Street as an income stream for investors. However, the US Federal Reserve has already stepped in with a programme to support “asset-backed securities”, including bonds holding auto loans.
Trump threatens to hold WHO funding, then backtracks, amid search for scapegoat - The Guardian has written a critical article on Trump again, saying he hunted for a new scapegoat on Tuesday in an increasingly frantic attempt to shift blame for thousands of American deaths from the coronavirus, accusing the World Health Organization (WHO) of having “called it wrong” and being “China-centric”. Trump’s early inaction has come under renewed scrutiny in the past day after a New York Times report that Peter Navarro, Trump’s trade adviser, warned in a memo in late January that the virus could put millions of Americans at risk and cost trillions of dollars. Susan Rice, a former national security adviser, told the Washington Post that Trump’s missteps “cost tens of thousands of American lives”. The president has repeatedly denied responsibility and sought to blame China, the Obama administration and the media. On Tuesday, with the US death toll exceeding 12,000, he unleashed a tirade at the WHO, even though it raised the alarm in January, after which he made statements downplaying it and comparing it to the common flu. “They’ve been wrong about a lot of things,” Trump said at the daily White House coronavirus task force briefing. “And they had a lot of information early and they didn’t want to – they seemed to be very China centric” – implying that the WHO had toed the line of Beijing’s early efforts to minimise the scale of the outbreak.
Virus news in brief
Source: Guardian daily blog or CNN daily blog unless specified otherwise.
- The number of countries not yet in lockdown continues to dwindle; Indonesia is the latest to announce a partial shutdown (link)
- The Royal National Lifeboat Institution (RNLI) is planning to furlough a third of its staff and is warning that its lifeguards may only be able to patrol the busiest beaches this summer if the lockdown is suddenly lifted (link).
- The French aircraft carrier Charles de Gaulle is returning to port due to an outbreak of the virus onboard. 40 sailors are currently said to be under strict medical observation.
- A small antarctic cruise ship with 217 people on board is marooned off the coast of Uruguay at the moment because 60% of people on board have been infected by the virus (CNN).
- New Zealand has recorded its lowest number of new coronavirus cases in a fortnight, one day after testing a record number of people.
- Damage, injuries and deaths reports are still pending from Vanuatu after Cyclone Harold hit it as a category 5 two days ago but it’s now hit Fiji as a category 4. Videos coming in show significant flooding. Harold is moving on and expected to hit Tonga within the next 48 hours. The Matangi Tonga website reported that Harold’s arrival in the country would coincide with a king tide and a supermoon early on Thursday morning. An extreme high tide warning is in force for Tonga for Thursday and Friday. Rescue and support for the Solomon islands, Vanuatu and Fiji will be difficult due to the need to check incoming supporters for viral infections.
- Authoritarian Turkmenistan gathered thousands of citizens for mass exercise events to mark World Health Day, state media said, ignoring the global trend for social distancing to fight the spread of the coronavirus pandemic. A state television broadcast late on Tuesday showed hundreds of people wearing identical coloured tracksuits cycling in close formation on a cold, damp day in the capital Ashgabat.
- The cofounder of Twitter Jack Dorsey has announced he is donating $1bn USD to fighting the virus with any funds left after it subsides going to girls health, education and universal basic income (link). Forbes suggests that this is nearly ⅓ of his wealth.
- Trains have started running to and from Wuhan again following a lifting of the lockdown.
- Tottenham Hotspur football/soccer players have been seen jogging together in local parks in London in a breach of the distance separation guidelines (link).
- Fifa has approved plans to extend player contracts and move transfer windows to allow seasons on hold due to coronavirus to be completed (link).
- Several major horse race meetings in the UK that are due soon have been cancelled while Royal Ascot (in mid June) is trying to see if it can host its races behind closed doors (link).
- USA - MLB is exploring options to launch its league behind closed doors early in Arizona according to a piece on ESPN (link). The plan calls for a start potentially as early as May with players residing in hotels and only venturing out for training or games. Any players that sign up could face being away from their families for up to 4.5 months. The idea is attracting a lot of noise on social media with the senior LA Times journalist Matt Pearce calling it “insane”.
- An Australian Rugby League Is Thinking About Putting 500 Players on a Luxury Quarantine Island says Vice (link). The sport, one of Australia’s most popular is proposing to quarantine about 500 rugby league players and training staff on a luxury resort island and then ferry them back to the mainland to play televised matches in empty stadiums. “Can someone tell me why a bunch of meat heads and their hangers on should unnecessarily use a huge amount of COVID-19 test kits so that they can get back onto their already ridiculous salaries,” wrote one Twitter user. Another was just as blunt and called the tournament “the very definition of a non-essential service.”
- USA - Acting Navy Secretary Thomas Modly resigned on Tuesday, a day after leaked audio revealed he called the ousted commander of the USS Theodore Roosevelt "stupid" in an address to the ship's crew. “When I walked on the quarterdeck of the TR I lost situational awareness and decided to speak with them as if I was their commander, or their shipmate, rather than their Secretary," Modly wrote. "They deserved better, and I hope that over the passage of time that they will understand the words themselves rather than the manner in which they were delivered. But what's done is done. I can't take it back, and frankly I don't know if I walked back up that quarterdeck today if I wouldn't have the same level of emotions that drove my delivery yesterday." he wrote in his resignation. (CNN link for more)
- USA - As the United States hit another record for most deaths from coronavirus in a single day, President Donald Trump said the country was "way under" any coronavirus models. “We’re way under any of the polls or any of the models as they call them,” Trump said in an interview with Fox Tuesday night. “We are way under, and we hope to keep it that way, in terms of death.” The US has recorded at least 398,809 coronavirus cases, including 12,895 deaths, according to Johns Hopkins University. Some 30,613 new cases and 1,909 deaths were reported on Tuesday. The President, who seemed to be taking what could turn out to be a premature victory lap, said that New York “is getting ready, if not already, getting ready to peak.” Trump also said that he would love to start the economy back up “with a big bang,” opening the entire country to business all at once. But he said the administration is also considering opening up in sections. (CNN link)
- Trump tweet: “The W.H.O. really blew it. For some reason, funded largely by the United States, yet very China centric. We will be giving that a good look. Fortunately I rejected their advice on keeping our borders open to China early on. Why did they give us such a faulty recommendation?” Factcheck.org says that US travel restrictions were announced 31st Jan and came into force Feb 2, a day after the WHO recommended travel restrictions.
- USA; 3.5 million Americans are thought to have lost healthcare coverage in the past two weeks according to the economic policy institute (link). The institute says that many of the newly unemployed will suddenly face prohibitively costly insurance options. The linkage between specific jobs and the availability of health insurance is a prime source of inefficiency and inequity in the U.S. health system.
- Vatican - The coronavirus outbreak is one of “nature’s responses” to human beings ignoring the ecological crisis, said Pope Francis Wednesday. “We did not respond to the partial catastrophes. Who now speaks of the fires in Australia, or remembers that 18 months ago a boat could cross the North Pole because the glaciers had all melted? Who speaks now of the floods?" the Pope told British Catholic journalist Austen Ivereigh in an email interview published Wednesday in The Tablet and Commonwealth magazines. “I don’t know if these are the revenge of nature, but they are certainly nature’s responses.”
Supply chain news in depth
Coronavirus: The Road to Economic and Social Recovery; We will recover, but how will we know when? - Descartes Labs, a geospatial imagery analytics startup based in California has written an interesting piece on medium.com (link) on how we may be able to use big data to understand when the economy will begin to recover. Remote sensing refers to data collected from satellites, aircraft, and distributed sensors that can provide information about the earth and help us understand human activities at a macro scale. While it is possible to understand the economic consequences of coronavirus through news reports and surveys, remote sensing provides direct observations that can be aggregated on a large scale and automatically processed for real-time insights. Descartes Labs, has developed a set of tracking and monitoring tools that can be used by businesses to understand consumer and supply chain activities that are critically important to revenues which harness aggregated mobility tracking, location-specific activity tracking, regional NO2 tracking and supply-chain tracking.
Logistics Manager Editor’s Blog: Has COVID-19 shown we have an e-commerce problem? - The editor of Logistics manager magazine (which has a UK lean in the topics it covers) has written an article reviewing the ecommerce sector. “If there is an area of the economy that is thriving right now it the supermarket sector. Yet limited delivery slots meant that only 14.6% of households received an online delivery in the four weeks to 22 March, up from 13.8% in March 2019 but most-likely well below actual demand. The truth is that as much as the logistics sector likes to celebrate its considerable achievements in the migration to e-commerce, some businesses were too stuck in the tried and traditional ways of working to actually reach the peaks. COVID-19 will change well-understood behavioural economics. Consumers won’t be the same after a global pandemic the likes of which we have never seen in our lifetimes.” He argues that businesses must immediately fully adapt to ecommerce channel fulfilment or they will most likely fail to survive. We were quick to celebrate the achievements of the sector, particularly in replacing the 30% of calories consumed outside the home with sales in bricks and mortar supermarkets. We were quick to celebrate that existing e-commerce infrastructure did not entirely fall apart. Yet there wasn’t enough capacity to deliver food to homes that wanted it, and in some cases needed it. There were not enough drivers and not enough vehicles, even if the right volume of food was in the system.
Supply chain news in brief
- Major UK supermarket chain Tesco has announced that sales jumped 30% in the first few weeks of the coronavirus outbreak as shoppers stockpiled in the run-up to the lockdown but additional costs involved in feeding the nation could reach almost £1bn. The UK’s biggest supermarket group said the full financial impact of the crisis this year was “impossible to predict” but that extra payroll, distribution and store expenses could add anywhere between £650m and £925m to costs. The UK’s biggest private sector employer said no member of staff had been furloughed but 50,000 staff were currently absent on full pay. In the last fortnight the company said it had recruited more than 45,000 people to keep its shelves full (link).
- Singapore has announced new plans to boost food production, including by turning car park rooftops into urban farms, as the Covid-19 pandemic disrupts global supply chains according to the Guardian daily live blog (link above). The city-state only produces around 10% of its food needs, but restrictions on population movement are wreaking havoc on farming and food supply chains – raising concern of shortages and price increases.
- Easyjet has secured £600m ($739m USD) in government funding to help it survive plus requested to fully draw down on its $500 million revolving credit facility, secured against its planes. Combined, the funding will give it access to £2.3bn ($2.8bn USD) equivalent in cash. (Source Airlive.net)
- Austrian airlines is pessimistic about the recovery time after the pandemic is over. In a series of tweets, it states that it assumes that it will have 25-50% of the demand in summer 2020 compared to 2019 and that pre-corona level will not be reached until 2023 at the earliest. It’s still reviewing what action to take but it’s likely that fleet reductions will occur.
- Austrian airlines’ parent company Lufthansa has announced plans to retire 42 of its Lufthansa and Germanwings branded fleet. Six out of forteen of its A380s will go whilst all Germanwings operations will be discontinued with some merged into the Eurowings brand. The restructuring programs already initiated at Austrian Airlines and Brussels Airlines will be further intensified due to the coronavirus crisis and both companies are also working on reducing their fleets as is SWISS International Air Lines which will also adjust its fleet size by delaying deliveries of new short haul aircraft and consider early phase-outs of older aircraft. In addition, the Lufthansa Group airlines have already terminated almost all wet lease agreements with other airlines. The reductions will significantly reduce the groups’ presence at its key airports in Frankfurt, Vienna, Zurich and Munich.
- CNN has a piece questioning whether US retail stalwarts Sears, JCPenney, Neiman Marcus and J. Crew will survive the epidemic. Many were forced to close stores in the face of declining sales even as unemployment reached a 50-year low. Now with a record number of Americans filing for jobless benefits, unemployment is likely to be elevated for months if not years to come, further cutting into Americans' appetite and ability to shop. Sears filed for bankruptcy in 2018 and its future has been in doubt ever since. JCPenney, Neiman Marcus and J. Crew are burdened by crushing debt loads. They're also at risk from declining market share, too many stores, limited online sales and a focus on selling discretionary items, analysts say.
- A formerly closed General Motors plant where workers once built transmissions for the Chevrolet Malibu is reopening as a surgical mask production facility. The plant, which closed last August, began making Level 1 surgical masks on Monday as demand for face masks climbs across the nation. GM said machines needed to make the masks were delivered to the Warren, Michigan, plant last week. Workers will ratchet up production over the next two weeks so the facility can manufacture 50,000 masks a day (CBS link).
- Several meat processing plants around the U.S. are sitting idle this week because workers have been infected with the coronavirus. Tyson Foods, one of the country's biggest meat processors, says it suspended operations at its pork plant in Columbus Junction, Iowa, after more than two dozen workers got sick with COVID-19. National Beef Packing stopped slaughtering cattle at another Iowa plant, and JBS USA shut down work at a beef plant in Pennsylvania. NPR has more (link).
- Customs brokers applaud US Customs keeping borders open to cargo - Members of the Washington, D.C.-based National Customs Brokers and Forwarders Association of America (NCBFAA) interviewed by American Shipper this week generally praised CBP for permitting the flow of legitimate trade across the continent says Freightwaves (link). “The CBP commercial traffic operations have not been affected other than the reduction of operations at plants in Mexico, which are shutting down due to safety concerns and government mandates on the closing of non-essential businesses,” said Jose D. Gonzalez, who operates his own customs brokerage firm at Laredo, Texas. “CBP has been pro-trade and understands the importance of the supply chain process,” he added. “They are working with the trade stakeholders to ensure the flow continues.”
- Politco says that President Donald Trump on Monday attacked his health department's watchdog for a new report revealing supply shortages and testing delays at hospitals responding to the coronavirus crisis, claiming the findings were inaccurate and politically motivated. "It's just wrong," Trump said during a briefing of the White House coronavirus task force, without providing evidence detailing what was incorrect. One hospital administrator said his mask supply would be depleted in three days. Another respondent said his system's regular supplier would take three to six months to obtain more masks and other gear due to the global rush for limited supplies. A third administrator said he fears tight supplies “endangers [staff] lives and the lives of their families.”
- Major apparel retailer Primark says it will help to fund the salaries of people working for its suppliers (link)
- The Loadstar says that forwarders are reporting concerns that shipments of medical supplies may not get through to their intended destination, as countries impound them en route for their own needs (link). The US has been particularly busy on this front, according to various media reports – so much so, in fact, that the Germans have accused it of “modern piracy”.
- Forwarders are also starting to abandon air cargo in favour of road transport in some cases says The Loadstar (link). InstaFreight, a road specialist, is one forwarder offering trucking services across Eurasia and claims that, with congestion affecting Chinese exports, the delivery times are similar to air – but cheaper and “more stable”. Depending on the number of drivers and the origin and destination, InstaFreight claims a transit of between 20 and 22 days, but this could be shortened by a few days if customers pay a surcharge to use two drivers.
- Forwarders are tearing their hair out over air shipment bookings. The Loadstar also reports (link) that there are significant issues for forwarders trying to move airfreight. “Capacity and space is a disaster, and we are seeing massive swings in rates from five- to 20-times the normal level. We have made bookings and then been advised the flights are cancelled,” said the chief executive of one mid-sized Canadian forwarder. “You book, plan, cancel, book another flight; sometimes three times in an hour,” he said, but so far, using freighter lift has been more straightforward, as all-cargo schedules have been reliable, he added.
- If you’ve ever wondered how you ground - and then maintain - an airline fleet, KLM (which certainly has a large fleet to think about) has written a fascinating blog just for you (link).
Good news section
The Easter Bunny Is An Essential Worker, New Zealand's Ardern Says - New Zealand prime minister has clarified (link) to the nation’s children that the government considers the easter bunny and tooth fairies as essential workers and are thus able to continue doing their jobs. Ardern announced the exemption in response to rampant speculation by New Zealand's youngest citizens, who had wondered how the coronavirus crisis might affect the traditional arrival of colorful eggs, chocolates and other treats. The prime minister however warned that in some cases, the pair might not be able to provide the level of service young people have come to expect. "So I say to the children of New Zealand, if the Easter Bunny doesn't make it to your household, then we have to understand that it's a bit difficult at the moment for the bunny to perhaps get everywhere," Ardern said.