February 7, 2020 / 11:14 AM / 19 days ago

Coronavirus disrupts air and sea freight, prices set to rise: DSV

COPENHAGEN (Reuters) - China’s fast-spreading coronavirus is squeezing air and sea freight capacity in the country with a spike in freight rates a likely consequence, one of the world’s biggest transport and logistics companies said on Friday.

The spread of the deadly virus has shut down many cities and factories in China and disrupted global air travel.

“We are already now seeing capacity problems on air freight,” Jens Bjorn Andersen, chief executive of freight forwarder DSV Panalpina (DSV.CO) said. “Sea freight is also being impacted.”

Shipping lines are re-routing cargoes and reducing calls to Chinese ports, which sets the scene for months of delivery delays ahead, industry sources have told Reuters.

While big European and U.S. airlines have halted flights to and from China in an attempt to limit the spread of the coronavirus, Andersen said some cargo flights are still available.

“It is still possible to ship goods on airplanes to nearby countries and then fly them out from there,” he said.

“We could see some significant increases in freight rates as a result of the uncertainty.”

Andersen said it was still too early to quantify the financial impact on DSV from the coronavirus, but acknowledged that the uncertainty was reflected in the company’s financial guidance for 2020, which disappointed some analysts.

Reporting by Jacob Gronholt-Pedersen;Editing by Elaine Hardcastle

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