Coronavirus (COVID-19) Having Increased Impact on Supply Chains

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Coronavirus (COVID-19) Having Increased Impact on Supply Chains

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12-Feb-20

Coronavirus (COVID-19) Having Increased Impact on Supply Chains

As we all know, the coronavirus outbreak just before Chinese New Year celebrations, is causing much disruption in China.  The timing is important to importers and exporters because many factories close and business slows as people travel to their homeland areas for the holiday.

The virus outbreak caused authorities to extend Chinese holidays as one way to limit the spread of the virus. Transport systems were limited, or in some areas, shut down completely.  People are not able to return to work or their jobs are not resuming - a troubling chicken or egg situation.

The rolling impacts of factories not producing and Chinese transport systems (for people and freight) experiencing reduced operations has caused ocean carriers and airlines to extend service reductions to the point where some in the U.S. and other areas are experiencing shortages of much needed raw materials and finished goods. 

Since there is still uncertainty about when the coronavirus will be brought under control there is concern about the economic impact in China and worldwide moving forward. Shippers need to be considering alternatives where possible to source material and other contingencies to account for this possible disruption.

We know that our Chinese partners are mostly working from home. We can be productive with our joint efforts but the lack of cargo and/or space limitations for ocean, and especially air freight, become more of a concern. Airfreight service is seriously curtailed due to the major reductions of passengers.  There is still a good amount of ocean freight service but the normal post New Year resumption by ocean carriers is not happening. We suggest booking requests be made as soon as possible and we will do our very best to find the space and transit times required.  We are seeing indications of price increases due to the market situations.

The coronavirus has now had more victims than the SARS outbreak of the early 2000's. And China's economy is four times the size it was back then - with a significantly greater worldwide impact. We will continue to monitor the situation and do everything possible to keep your cargo moving and advise you of the status of the situation.