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Although we are experiencing minor delays across our freight forwarding network, we are closely monitoring the Coronavirus (COVID-19) situation and impact it is having on our customers and shipments. Customers are encouraged to check their online dashboard for updates or contact us with any concerns.

Coronavirus impact on Supply Chain

27th March 2020 in Freight Forwarding, News & Media by The Explorate HQ Newsroom

The spread of the coronavirus is impacting individuals and supply chains alike, with hundreds of new cases announced every day.

The biggest task facing the world right now is stopping the spread of the coronavirus.  

COVID-19 caused quarantines and thus factory shutdowns in China at the start of 2020, leading to a reduction in export. The drop in demand resulting from the factory slowdown in China will cost ocean shipping companies a combined $1.9 billion, according to the most recent estimate from Sea-Intelligence. The Australian Government’s decision to impose a 14-day quarantine on vessels that leave mainland China after 1 February bound for Australian ports is causing scheduling issues for Australian shipments. 

As an example, Maersk have changed their vessel routing to go via Sydney and Melbourne prior to docking in Brisbane to allow a 14 day quarantine from leaving Ningbo. 

Within Australia, state borders are being shut. The Government statements have listed transport and logistics, or the commercial supply chain, as an essential service that is able to continue work despite state shutdowns, including continuing to work cross borders.

But even when the global public health crisis is under control and global supply chain disruptions caused by COVID-19 end, many large companies expect that businesses will not return to normal for between six to twelve months.

Supply Chain networks are now faced with two potential problems:

With China ramping up their production again, we will start seeing ocean carriers starting to put the normal volume of ocean-freight capacity back online. Even with other countries going into lockdown, the question is, are we going to domestically have the network in place to be ready to absorb that surge of inbound movement and be able to get products back to all of the distribution centers as well as all the stores and where the product needs to go?

If we successfully do that, the next problem we face is;

With millions of people out of a job, spending on commercial products will decrease, the demand for products in stores will slow down, warehouses locally will reach capacity and therefore shipments of products from overseas will not be as frequent or no longer be required. This is going to create a lot of inefficiency and a lot of complexity in the supply chain of companies.

Most supply chain organisations are in crisis management, assessing impacts and response on a daily, if not hourly basis.

Moving forward, there will be an increased need for freight forwarders to create transparency within global supply chains. Explorate’s predictive model helps corporate decision makers manage the dynamic planning process of supply demands with the consideration of uncertainties and risk factors. 

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