Overview of Coronavirus
Latest update – 5th March 2020
The top international story over recent weeks, has been the increasing spread of coronavirus (COVID-19) with a significant impact on global tourism, it is inevitable that there is now a very real effect on the supply chain.
China accounts for 16.5% of world GDP and is the world’s second largest economy. It is therefore no surprise that this has had a great impact on the supply chain with severe disruptions to sea and air freight with factory lockdowns in China causing shortages of materials and more.
With a significant financial fallout in the first quarter of 2020, it looks as though it is set to impact the second as well. With shipping being one of the major industries affected we are looking at how it has and what little can be done to counteract that impact.
How is Coronavirus affecting the Supply Chain?
As the breakout of the virus coincided with the annual shutdown for Chinese New Year, there was a reduction in port calls from major carriers due to lack of supplies. Factory shutdowns across the country have had a global effect as consumer – facing industries within the UK rely heavily on imports for many specialist components and materials that are sourced from China. This of course, has a knock on effect – possibly delaying production of certain goods for an unforeseen period of time.
Situation in China
Since the Coronavirus breakout in December 2019, many supply chains in China are still enduring being in the restoration stage. According to Lloyds Loading List it is suggested that “operations in manufacturing and logistics within China could reach some form of normalcy sometime in early March, with logistics capacity and rates for shipments from and to China unlikely to return to normal before April. Given the fluidity of the situation and the vast operational and financial implications across multiple industries, it may take several months to assess how the event will have impacted businesses.
Due to ongoing shortages at some of the major Chinese ports, work production is functioning at a lower volume than usual and the port authorities of several countries have issued some precautions.
The majority of carriers have remarkably started to fully operate again as of 1 March, but some have adjusted their capacity to match the increasing demand since factories resumed back to work from mid-February.
The impact of the virus spread on the global sea freight sector has caused disruption, but the updated status shows that the Chinese port operations are back to normal as follows:
It has been reported that Wuhan airport is still and will remain officially closed to commercial traffic. Airports in Mainland and Hong Kong (SAR, China) are however operational, as the demand for air logistics has increased since the production levels have resumed.
Statistics show in a recent report from Lloyds Loading List that “more than 25,000 flights have been cancelled per week so far, reducing air freight capacity by approximately 50%. In addition, Emirates Airlines has reportedly cancelled freighters from Guangzhou to Dubai until 27 March, while Etihad has cancelled freighters from Shanghai to Mumbai and Chennai until 30 March.”
To date, cross-border road freight to and from Hong Kong (SAR, China) remains intact, but the China/Vietnam Border (Pingxiang) only resumed its operations on February 17, 2020 and is currently still undertaking improvement.
For cross-border road freight to Central Asian countries, (China/Kazakhstan Border – Horgos) remains closed until further review, which is said to be reportedly around mid-March. For cross-border road freight to Europe, the China/Russia (Manzhouli) has re-opened for business.
Lockdown Areas in Italy
We are working closely with customers to ensure there is little disturbance with the coronavirus affecting your supply chain, as well as working on and sourcing new routing options.
We will continue to update you as the situation unfolds. Please do not hesitate to contact us if you require further information.
Xpediator Group’s Internal Measures
The Xpediator Group has been closely monitoring the Coronavirus (Covid-19) situation and following the advice issued by HM Government and Public Health England (PHE).
As a result, we have implemented a number of precautionary steps have already been taken to protect our people and the services we provide.
These ongoing measures include:
To date, the Xpediator Group of companies has had no suspected cases amongst its workforce, if we were to do so we would follow the advice issued by PHE and ask the individual to self-isolate for the required 14 day period.