Freight & Trade Alliance (FTA) provide the following update for members / industry on the coronavirus situation.
Well February 24th came and went and still we are none the wiser as to when we will see an end to disruption of supply chains both in China and the rest of the world. The news on the weekend of coronavirus outbreaks now surfacing in Northern Italy and South Korea have put more pressure on the global medical community to find a way to curb the spread as well as the international trading community on how they manage what is now becoming a harsh reality of what is to come;
• Shelf stock will continue to diminish – as noted in an earlier update shelf stocks will start to dwindle – commentary from importers at a recent meeting indicated a shelf stock of 3 – 4 weeks of products from car parts to household goods
• Alternative supplies will become exhausted and more expensive – local importers have advised me they have for some weeks now been looking to source stock from other sources / countries, however the issue is so are businesses in other parts of the world and there are simply not enough sources to fully supply the orders.
• Lack of container movements will create surpluses and shortages – if full containers are not moving into countries then those countries have no empty containers to export their goods back to their offshore clients. This has the potential to increase costs due to the expense in relocating empties and higher prices due to minimal stocks
• Staffing issues – there is already concern amongst many in the industry as to what they can do if they have minimal work for their employees due to these lower volumes. Of course putting off casuals or insisting on leave for full time employees will create other socio-economic issues and for those that do have funds a restraint on what they purchase, thereby hurting the economy event further.
• Increased prices for transport, be it air or sea, will be something that we will all have to address in the months after normality returns to the China economy. The issue that we continue to hear from industry participants is that this “normality” is getting further way, some saying September.
Northern Italy / South Korea
As mentioned above, outbreaks are now becoming more widespread across the globe in particular Northern Italy, South Korea and Iran – at the time of writing we had reached out to various shipping lines and forwarders and they advise that at present there are no issues impacting vessel or aircraft movements of cargo in these areas.
General Update – China
From a review of a range of web sites, refer earlier notices, it would appear the main issue continues to be a shortage of staff in the transport arena driven by both the inability of workers to get back to their home provinces due to internal travel restrictions aligned with their personal concerns of returning to face to face environments. Transport is also impacted as movements between provinces is also being restricted.
Please note the below links for updated information
• Fact sheet for Airline Industry
• Latest Shipping notifications
• Loadstar web site – broad coverage of a range of related issues globally
FTA suggest members / industry maintain close relations with their forwarders, agents, shipping lines, clients and suppliers / agents in China to ensure they have the latest information available. This is a time for review and planning not for panic.
To stay abreast of all developments and general information concerning the Novel Coronavirus we suggest members maintain a watching brief on the Department of Health website
FTA will continue to monitor issues surrounding the coronavirus and keep members updated as necessary.
John Park – Head of Business Operations – FTA / APSA
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