2020.02.10 11:29

Coronavirus crisis: Lithuanian logistics and shipment companies to take a hit

Erika Alonderytė, BNS 2020.02.10 11:29

The coronavirus outbreak in China is affecting the logistics business in Lithuania. Transit flights over the country have decreased as a number of global airlines have suspended flights to China.

Meanwhile, postal deliveries from China to Lithuania might be disrupted as many logistics centres and production companies have stopped operations in China.

Read more: Coronavirus: Lithuanians ‘clearing out’ stocks of face masks

Lithuania's flight management company Oro Navigacija (Air Navigation) estimates its revenue from transit flights to China will drop, but that should not have a major impact on the company's operations.

“It's hard to estimate exactly how much the company will lose in revenue. It will depend on how fast the coronavirus challenge is put under control and how long airlines will be canceling flights to China,” Vytautas Beniušis, the head of communication at Oro Navigacija, told BNS.

In January, the company serviced 640 flights transiting Lithuania's airspace to and from China, down 6 percent from the same period last year. The number dropped 43 percent in the first days of February.

The company charges around 170 euros on average per flight in its airspace from Europe to China.

Transit flights account for around 75 percent of Oro Navigacija's serviced flights, bringing in around 21 million euros a year, or around 70 percent of its total revenue. Flights to China make up between 4 and 6 percent of all daily flights over Lithuania.

Read more: China and Lithuania setting up coronavirus hotline

Post deliveries from China have so far been arriving without disruptions, according to Vaida Budrienė, the head of the corporate affairs department at Lietuvos Paštas (Lithuanian Post). However, as many logistics centres and production companies have halted operations in some areas of China, this may affect deliveries in the future.

“Electronic shops accept orders, but there are no people to pack, send, produce. Disruptions might be possible in this part,” Budrienė told BNS.

Shipments from China account for 64 percent of all parcels handled by Lietuvos Paštas.

Meanwhile, the parcel delivery company DPD Lietuva says most Chinese electronic shops have storage facilities in Europe, therefore no major disruptions are expected in the short run. But problems might arise in the future, if movement in China is restricted.

“If the crisis continues [...] for a longer period, retailers will feel it first and then we follow as intermediaries,” Tomas Maišvila, the company’s head of communication, told BNS.

Parcels from China make up around 1 percent of DPD Lietuva's total shipment volumes.