BRi USA News - How The Coronavirus May Lead to Supply Chain Delays in USA
Dear all Valued Customers
How Coronavirus May Lead to Supply Chain Delays
The World Health Organization’s designation indicates that international public-health authorities now consider the new coronavirus a significant threat beyond China.
The virus has now infected over 20,000 people as fatalities also continue to rise.
The outbreak of this deadly disease is raising concerns for the shipping industry and what to expect during this time.
Container volumes are still moving through Chinese ports despite widening global exposure to the coronavirus, with industry expectations on the impact — muted by the seasonal lull in demand during now-extended Lunar New Year celebrations — ranging from minimal to moderate.
While airlines have slashed services to and from China, container lines have so far held back on cancelling sailings, although freight forwarders and cargo owners tell JOC.com they are preparing for a rash of blank sailings should factories remain closed.
US airlines Delta, United, and American are the latest air carriers to act, announcing they were suspending service to mainland China.
The spread of the coronavirus will lengthen the slow period for eastbound trans-Pacific freight volumes that traditionally follows Lunar New Year.
Vessels arriving at US ports in the coming week or two should be relatively full.
Past experience indicates that factories in China close out their final orders before the Lunar New Year, filling ships and causing some shipments to be rolled to departures the following week.
Lunar New Year celebrations began Jan. 25.
Manufacturing tends to shut down for two to three weeks over Chinese New Year, but should factories remain closed into March, carriers will have little option but to cancel more sailings.
Further, some manufacturers may also experience delays when labour days return as they may need to self-quarantine for 14 days, further delaying normalcy.
- While many carriers continue to operate China ports, excluding Wuhan port, there are reduced crews working this week at marine terminals, warehouses, container freight stations, drayage companies, and regulatory agencies in China.
- Notwithstanding the efforts of these ports to keep running during the crisis, their operations are likely to be severely hobbled by lack of staff, as will the logistics side by an absence of truck drivers and warehouse staff.
- Additionally, most operators that are able to land at ports are going through strict health checks before being allowed entry.
- Many carriers plan to reopen offices on February 10, with some staff working remotely in the meantime to mitigate the influx of traffic upon returning from the extended holiday. Nearly all carriers have closed their Wuhan offices until further notice.
- For ships bound for North America, both the U.S. Coast Guard and Transport Canada Marine Safety and Security have put processes in place for advance notice of any crew or passengers with Coronavirus symptoms.
- Due to government restrictions, many offices will reopen for bookings on February 10, but the availability of rail/truck will be limited. The government is also restricting truckers to prioritize job for the medical and daily consumption commodities. Therefore, there are/will be less trucks available to work container traffic.
- Many carriers have cancelled flights to/from Wuhan, as well as all major China airports including Beijing, Shanghai, Xiamen, etc., through February 28. Some have not committed to a deadline, just stating that flights are cancelled “until further notice.” Most are still operating all flights to/from Hong Kong and Taiwan at this time.
Keep in mind with the above situations, shippers may see deviations/quarantine of cargo as well as transportation costs and delays.
Flexibility with alternate routes are strongly encouraged when assessing your supply chain.
It is also worth noting that the World Health Organization has also advised that anyone/any business receiving packages from China are not at risk of contracting coronavirus.
From their analysis, the virus does not survive long on objects such as letters and packages.
BRI Asia-Pacific Offices
BRi Shanghai, Qingdao, Ningbo, Xiamen and Shenzhen will hopefully be back to a full team Monday, February 10 following the Chinese New Year extension. We are currently running a skeleton team due to Chinese Government restrictions.
BRi Hong Kong remains open for business as usual.
DHS Cracks Down on Forced Labour
This week the NCBFAA, or National Customs Brokers & Forwarders Association of America, reminded its members & importers that the U.S. Department of Homeland Security will increase scrutiny on shipments that may contain products made by forced labour.
Section 307 of the Tariff Act of 1930 (19 U.S.C. § 1307) prohibits the importation of merchandise produced partially or in whole by forced or indentured child labour.
Full information is available on CBP’s website, including a link to Detention Orders issued on certain merchandise from certain suppliers.
If you have any questions in relation to the above, please feel free to contact your assigned Customer Solutions Representative.
Keeping you updated,
BRi Customer Solutions Team
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