THE IMPACT OF COVID-19 ON INTERNATIONAL TRADE
With each passing day we learn more about the Coronavirus (COVID-19) outbreak and the importance of social distancing. And while these preventative measures are necessary for the health and safety of us all, it does come with sacrifices to the health of our businesses.
However, the best way to brace for impact is to understand what is coming and prepare for the outcome. The following are a few ways in which global supply chains will be or have already been impacted by the COVID-19 outbreak:
WHAT TO EXPECT IN THE COMING WEEKS
A SHORTAGE OF GOODS FROM CHINA
Data shows that global production out of China fell to an all-time low in February as the virus shuttered factories and container ports. The Port of Los Angeles saw imports at their facility plunge 22.5% in February as a result.
The good news here is that China has already begun its recovery with many factories reopening last week. Everything seems to indicate right now that the factories broadly are operating at 50% of capacity which is up from 40% a couple of weeks ago.
DELAYS IN RECEIVING ORDERS FROM SUPPLIERS
Despite the reopening of factories, there will continue to be delays in shipping. With many countries implementing varying levels of population quarantines and social distancing, there has been a shortage of port workers and truck drivers to keep the flow of goods moving. This shortage of air and ocean freight options will remain an issue even once orders are capable of being filled.
If you are importing from China it can take up to 30 days to receive your goods. This means that even when factories get back to operating at 100%, it will take time for the amount imports arriving to get back to normal levels. The Port of Los Angeles expects to see arrivals in late April or early May to pick up “just a bit” according to Gene Seroka, the Port’s executive director.
DIFFICULTY COMMUNICATING WITH U.S. BASED VENDORS
As more United States based vendors moving to remote work or outright closing for the next couple of weeks, you may experience more difficulty communicating over that period of time. Working remotely is an adjustment and can be difficult for businesses use to in person communication.
WE ARE HERE TO HELP
During this time of uncertainty, PNG WORLDWIDE will continue to be available as a resource to you, your staff, and our customers. We are taking a proactive approach consistent with Federal and State government guidance to keep our workforce healthy and safe. While we continue to monitor the situation very closely, we have contingency procedures in place should our staff be required to work remotely. The situation is fluid, changing rapidly, and is requiring fast, significant, and thoughtful planning.
In the event that you or your team needs additional help to get through this downtime, reach out. We are prepared to help.