UPDATE Coronavirus Impact on the Supply Chain 1

UPDATE: Coronavirus Impact on the Supply Chain

The air cargo industry continues to be affected by the coronavirus epidemic resulting in the Chinese airlines announcing flight suspension, up to 50% on some international flights, due to limited demand in passengers and now the limited cargo market. The cancellations mostly impact the Beijing, Shanghai and Guangzhou gateways. At this time, the reduction is said to be implemented from Feb. 9th to April 25th. Our Team has established alternate services and routings to provide clients with options once China opens February 10th. The new flight schedules have not yet been announced and we will provide updates once they are available.

China terminals are open but the logistics services are severely lacking on the trucking and labor side as the workforce is not due back to work until February 10th in many areas. The situation is further affected by the government imposed regulations that returning workers from certain areas of China can be required to remain in quarantine for 14 days or may be refused entry to the city all together depending on the city they visited during the CNY holiday. Some factories are expecting a production capacity shortage up to 50% depending on where their employees are returning from in China. The shortage is expected to last to the end of March at this time. Operational capacity is heavily dependant on the virus containment timeline. With these new regulations, some carriers in China have announced they will only accept bookings for the sailings the week of Feb. 17.

Wuhan, the virus epicenter, is the largest transport hub in inland China, home to the factories of countless multinational and local businesses. It is also the country’s biggest ghost town. A lockdown triggered by the coronavirus means most plants are closed. The same applies across more than a dozen other Chinese cities. Supply chains, both domestic and global, are at risk.

Shenzhen government announced new health regulations that all companies must comply with or they will not be granted permission to re-open on February 10th. All the requirements are aimed at protecting and preventing the further spread of the virus. The required measure to supply face masks, along with necessary protective and temperature sensory devices have been in place at our China offices to assure compliance to the regulations.

On a local front, Canada has now confirmed a flight to transport Canadians from Wuhan back home on February 6th. For more details, please refer to the link by clicking here.