As the supply chain consequences become more widespread, we are closely monitoring the status of the Coronavirus outbreak in China in order to minimise disruption for our customers.
Coming on the heels of Lunar New Year, the virus has caused local and central governments to extend the holiday in order to reduce the opportunities for transmitting the disease. However, the rapidly evolving situation means that dates and plans may change suddenly as the outbreak progresses.
The Evolving Situation
As of Monday 3rd February, the 2,000 new infections had been reported over the past 24 hours. This brings the total number of cases to over 17,000. Data last week had reported around 1,000 new cases each day, so it is possible that the rate of infection is still escalating.
This is important, as it may affect the length of production shut downs that are currently in place. Currently, the Lunar New Year holiday has been extended to February 10th but this was based on the previous infection rate. As a result there is a risk that the break could be extended if the rate continues to increase.
This will have an especially powerful impact on carriers.
Many commercial airlines have already suspended flights, some as late as the end of March but most to the end of February. We’re seeing a similar trend in shipping lines – with major lines including Maersk starting to blank sailings this week in response to the lack of business.
Planning your strategy
For businesses planning capacity through the coming months, there is a significant chance that production will be impacted beyond the 10th of February, possibly into March.
While we sincerely hope that a cure for Coronavirus will be found soon, and there is progress in this area, it is important to have contingency plans for your supply chain.
We’re currently speaking with our Chinese colleagues to check which factories are coming back, tracking it by region. However, if production is delayed further businesses may need to near-source or switch manufacturers in order to guarantee future supply.
In summary, the situation is still evolving quickly, so current dates may change. You should be talking with your manufacturers and forwarders on a daily basis to create flexible solutions for the various outcomes that may occur.
If you need help on how to do this, any business can email email@example.com, regardless of whether you currently work with Zencargo.