DHL Global Forwarding declared force majeure due to the impact of COVID-19

DHL Global Forwarding has cited force majeure for all air and sea transport contracts due to unforeseen effects of the global outbreak of the Corona virus (COVID-19), according to warnings from investors. Other forwarders have shared with JOC.com.

With almost all elements of the aviation and maritime supply chain on current fixed routes unpredictable or controllable, DHL Global Forwarding has decided to declare 'Force Majeure' and reserves the right to correct. Exchange its services under the current virus situations, the company announced in an email on Thursday. “We will continue to look into this issue because the situation in the industry is constantly changing at this time. DHL Global Forwarding continues to provide extensive transportation services and assists customers tirelessly in securing their supply. ”

The delivery company said the move is part of their business plan. Force majeure is effective when unforeseen circumstances prevent one party from performing the contract with another. In the coming context, this usually means that a freight forwarding company cannot transport the goods that it has contracted with a shipper because it is impossible to find the possibility of transporting such cargo.

Despite the force majeure, DHL said it would do everything possible to meet the terms of the contract with the shippers. The company said it saw the notice as a safeguard in case DHL could not find an available load due to circumstances beyond its control.

"In the event of a COVID-19 epidemic, a carrier may lose its performance if it cannot operate as a result of the virus," DHL said. "In this unprecedented situation, all efforts are directed towards securing solutions for our customers and supporting them."

An 'impossible' situation

With many trains being canceled and reorganized, and air transport capacity significantly affected by the sharp decline in passenger flights, JOC.com has found that many forwarders are taking care of themselves. protect yourself by warning customers that they may need to make force majeure provisions.

A German-based forwarder requested to remain anonymous, said we are declaring force majeure on most aviation and maritime contracts. It is not unusual these days. If the ship is not exporting, an empty container is not available. If aircraft aren't taking off and supplier factories are closed, how can we - as a logistics company - provide supply chain management with aviation and maritime solutions? "

"It is impossible. Many factories are stopping production because their supply chain has been destroyed by the Corona virus," the delivery company added. "It is a nightmare, and it is not impossible. resistance, because as a logistics company, we will be responsible. "

The problem appears to be tense when shipping disruption upsets third-party logistics service providers who do not directly control transport assets related to shipping and air capacity.

In general, we are starting to see a huge demand [for air transport coming from the UK] with cargo currently being shipped from the continent, ”said Angus Hind, director of aviation and maritime forwarder Europa Air & Sea, told JOC.com after the US transatlantic travel ban was introduced on March 13. "All airlines apply spot prices. for all shipments and disrespect the contract price because of limited transportation capacity.

"Ashley Craig, a Washington, DC-based commercial lawyer with Venable, IHS Markit's representative, said the last time a major force majeure event occurred after the bankruptcy of container carrier Hanjin Shipping 2016. He said that due to the nature of the Covid-19 situation, both shippers and carriers (with forwarders acting as non-property carriers) may be able to ability to declare force majeure in contracts.

Phaata (Source: JOC)

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