China and cargo players issue call to keep calm and carry on

Beijing is turning from prevention to recovery as it addresses the coronavirus epidemic.

Cuts to taxes and fees for shipping and logistics are special priorities as top officials call for a rapid resumption of production.

Meanwhile, China Cosco Shipping and France's CMA CGM were among shipowners and agents appealing to foreign counterparties to keep calm and carry on, ignore rumours, and not to worry too much about the health of their crews.

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Last week, Premier Li Keqiang called a meeting of China's quasi-cabinet — the State Council — to issue a call to support transportation.

Shipping to shopping

In the meeting, Li — who formally ranks second to President Xi Jinping in the leadership of the People's Republic of China — not only signalled macroeconomic stimulus plans, but called for local, industry-specific measures in transportation, from ocean shipping down to China's ubiquitous moped-powered e-commerce network.

A stimulus programme is widely expected to follow the relaxing of quarantine measures to try to return China's full-year GDP growth to normal levels after the huge first-quarter hit.

Most of the specifics of implementation are being left to private companies and local and provincial authorities, under central government "guidance".

"The resumption of production and logistics in the transportation and express-delivery industries cannot only provide strong support for epidemic prevention and control, but also facilitate economic circulation and meet the needs of people's livelihood," an official summary of the meeting said.

"To this end, first, it is necessary to guide the relevant companies to resume work in an accurate and orderly manner, and to eliminate unreasonable re-examination and re-approval; second, to increase efforts to reduce taxes and fees; and third, to encourage insurance companies to properly reduce the insurance costs of vehicle, ship, and aircraft whose operations were suspended during the quarantine period."

In addition to pushing companies to pitch in, the government will cut its own fees.

Export fees

Few measures were specifically named but, starting from this month, import and export fees supporting port construction will be waived and other government-imposed port fees will be cut by 20%.

Individual ports have announced detailed incentives, including reductions to fees and taxes.

For example, Zhoushan, the world's busiest dry bulk port, has relaxed regulations on pilotage and bunkering, allowing ships to proceed to the crowded port's inner anchorage if weather requires, and cutting pilotage fees for ships doing so, said Ryan Wang Xin, deputy director of the Zhoushan International Marine Service Base.

The heavy emphasis on making up for productivity losses is new, but China was already taking steps early on to avoid a shipping slowdown. On 31 January, it prohibited local port authorities from requiring ships to sit at anchor for a 14-day quarantine period and from denying ships access to berths.

Petition plea

Meanwhile, Chinese shipowners and agents are appealing to partners worldwide not to panic about Chinese ships and goods.

China's two biggest shipowners — China Cosco Shipping and China Merchants Group — alongside alliance partner CMA CGM and other cargo players, have appealed to foreign counterparts not to take irrational measures in the name of disease protection.

Rejecting cargoes from China does nothing to prevent the spread of coronavirus, the companies say in a petition being circulated on social media and reported by Shanghai-based news service Ship.sh.

The petition urges shippers and freight forwarders not to be excessively worried about the health of crews, and not to listen to rumours about the disease.

False reports that the US is turning away cargoes are impeding business — especially reports of interrupted operations.

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"It had been rumoured that vessels that have been to China in the last 14 days were being refused permission to unload cargo, even if there are no suspected cases or sick crew on board," the petitioners wrote. "In fact, the US is not rejecting shipments from China."

World Health Organization findings that the virus does not survive long on the surfaces of objects mean that goods carried on a ship from China are very unlikely to be disease vectors.

Similarly, strict control and reporting measures imposed on Chinese crews make them unlikely carriers.

"Shippers and freight forwarders, please do not worry excessively about the question of the health of shipping company employees and ships' crews," the signatories wrote.