CEVA Logistics declared force majeure, citing the impact of COVID-19

CEVA Logistics has become the latest global forwarder to declare force majeure on all ocean, air and land transport contracts, taking measures just days after DHL Global Forwarding took similar action to dealing with unforeseen effects of the 2019 Corona virus disease (COVID-19).

CEVA, a subsidiary of CMA CGM, told customers in an updated situation of the Corona virus on Thursday that the epidemic is disrupting everything in business and the necessary responses. Implementing governments are completely out of their control.

"Because these things are unforeseen, and within the definition of force majeure, the principles are universally accepted in business and recognized in law," CEVA said in its statement. "This means that [CEVA] is temporarily exempt from normal contractual obligations in which these things are not possible, due to the Corona virus disease and its effects."

This measure will apply to all CEVA services, including air freight, sea freight, trucking, rail, customs brokerage and contract logistics.

DHL Global Forwarding declared force majeure on March 19 because of the effect of Corona virus on air freight and sea freight.

Unexpected operational environment

According to data from Sea-Intelligence Marine Consulting, at least 77 ships were canceled due to the impact of Corona virus on demand, which is predicted to result in a 1.9 million TEU drop in productivity in 2020. By air, the majority of passenger flights on the transpacific and transatlantic have been landed, and with a total cargo volume of more than 60% of the global air transport capacity available, this caused a serious shortage at a time of strong demand.

CEVA Logistics said it has taken a force majeure step because of the unforeseen operating environment. The forwarder said that at present, "reserves the right to modify all or part of its service, change the workflow and any agreed upon rates, apply surcharges, or otherwise The other is to take whatever measures are necessary to adjust our business operations and obligations to customers, suppliers and other stakeholders, in response to ongoing situations. ”

Ashley Craig, a Washington-based commercial lawyer authorized by Venable, representing IHS Markit, said the last time a major force majeure event was declared after the bankruptcy. of container carrier Hanjin Shipping in 2016. Craig said that due to the nature of the COVID-19 situation, both the shipper and the carrier, with forwarders acting as non-property carriers, may likely to declare force majeure in the contract.

Phaata (Source: JOC)

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