The world has not witnessed such a mass global impact in recent times caused by the Coronavirus outbreak. The logistics sector is impacted the most and is expected to have more severance in the coming days particularly in the wake of the Chinese New Year.
According to the latest report, the contagious pneumonia virus “Corona” that spread in the port city of Wuhan has claimed more than 1000 lives and is now declared as a global threat.
Many cities remain shut down and borders are sealed as precautionary measures are taken by the Chinese government to contain the spread of the virus and reduce casualties.
Under normal circumstances, Chinese exporters should have restarted their trade flows by the 7th of this month after the Chinese New Year.
As the Chinese government is in the process to quarantine people and contain the situation, many cities and ports remain closed and speculations are rife that it will still take time for all activities in particular logistics transportation to return to full normalcy.
According to the revised circular shipping lines are to start operations from the 1st of March which was earlier expected to be on the 10th of February. This means that at the time when the ports will be opened up there are serious anxieties on the availability of required ships that are necessary to ship goods. This is going to impact the global demands and whether it would be met on time.
One major saving grace amidst such uncertainties is that even though there is a complete halt in manufacturing and exports from Wuhan the Chinese New Year became a savior in disguise for the global market.
There has been no production from the 25th of Jan to date and exports are expected to restart only by the end of the month. Also, importers from across the globe must have amassed large scale inventory for these two weeks but delays in shipments at ports will slowly negatively impact as these inventories would run out.
This is going to seriously create dire consequences on the global market both on imports as well as exports.
It is important for us in such tested times to share a few important pieces of advice that one can take as necessary precautions to ensure that your businesses are least affected.
Prepare for the situations: Here are a few important points that will help you to braze this crisis and reduce unnecessary panic and losses.
- Communicate with your suppliers: Take into account all possible imports or exports to and from China which you have in the coming weeks. Get in touch with your suppliers and keep a check on how the situation progresses.
- How long can you delay shipments: Delaying shipments indefinitely a big “No” in normal circumstances but in such a scenario is it the best way to put forth. Access the type of goods you have in your shipments and if you can afford to delay it, much better as demands for shipments following the extended break are going to be very high. If you can delay the same the cheaper it will get.
- Alternative Transportations: If it is absolutely not possible to delay your shipments and goods have to be immediately shipped out then it is better to look out for alternative transport methods like Train or Air.
- Be well informed of the latest developments from your carriers: Though there is constant progress in stopping the spread of the virus always be well fed with current and latest updates from your suppliers, carriers as well as government health organizations.
The world is a witness to a deadly virus that has completely changed the global market scenario in such a short period. There has to be serious thinking on the way the logistics industry operates and some of the basic methods of procurements.
We are in such a connected world today that any situation as such happening in one part of the globe has adverse impacts throughout the globe. The coming weeks are going to be very critical and one has to keep a close watch on how it’s going to impact various industries in Wuhan and it all depends on how soon it can get back to its feet before the supplies run out.
It is time to review supplier strategies and procurements so that we can make apt adjustments to tackle such risks in the coming future.