1) Reduced Air freight
Numerous airlines (British Airways, Lufthansa, United, American, Delta) have suspended all service to and from mainland China. Other airlines, such as Cathay, are also starting to reduce flights to mainland China by up to 50% through March. Further reductions and suspensions of scheduled flights are to be expected, we expect these restrictions to impact rates, lead to a shortage of air freight and create delays.
2) Reduced Courier Capacity
Couriers have issued partial or full lockdowns in 13 cities within China and expecting more to come. Thus, causing delays in inbound and outbound deliveries. While most postal solutions are severely affected, most express shipping methods are functional during this outbreak.
3) Factory production in China
The Chinese government has extended the Chinese Lunar New Year holiday across China through February 2nd in response to the virus outbreak. Meanwhile, China’s State Council has postponed the end of the Lunar New Year to February 9th in Shanghai, Ningbo, Shenzhen – Guangdong, Xiamen, Fuzhou, and Qingdao. Various businesses have also directed employees to work from home. Factory production of goods is expected to be severely delayed as workers will not be returning to work until much later than anticipated.
4) Warehousing SLAs
In line with work resuming dates, it’s important to collaborate with your respective account teams to mitigate any potential impact to your shipping plans. If goods do not reach their destination via alternative routes or the expiry dates cannot be met, it must be determined whether the goods must be stored, returned or even destroyed. SLAs in supply chain contracts may be violated and there is a risk that goods will arrive at the recipient delayed or in a condition that cannot be used anymore.
Shipping Management Tips
While the most pressing issues to be resolved are from a transportation and supply chain point of view, it’s important to communicate early and often with those affected.
We will notify our affected clients of the extended delivery lead times during this outbreak. We continue communicating directly with our suppliers’ factories and warehouses, while some may not be fully operational, most have remote customer service teams to support our queries.