Far from dying down, COVID-19 is spreading in many countries around the globe. The result of this has been massive shutdowns of everything – from shops to restaurants to schools to sports – in a variety of nations.
Of course, all of this disruption impacts the supply chain, making it likely that post-COVID-19 recovery will be slower and more difficult than expected.
Here is the current COVID-19 situation and the impacts we’re seeing.
Where Are We With COVID-19?
COVID-19 deaths have now passed 7,000 worldwide, and the U.S. has had more than 100 deaths. In the U.S., thousands of schools have closed for several weeks and stores and supermarkets are limiting hours or closing.
The CDC has encouraged social distancing and recommended against gatherings of 50 people or more for at least eight weeks. Health officials also plan to ramp up testing significantly.
Outside the U.S., the largest impact is in Italy. Italy’s hospitals are overwhelmed and more than 2,500 people have died. Italy is the second-most heavily impacted nation after China, and the outbreak is focused on the Northern region of Lombardy. However, the government has placed lockdowns across the country. One key factor in Italy is that almost 25% of its population is 65 and over, making it especially susceptible.
The largest impact is in China. Fortunately, that nation is finally seeing a drop in cases. However, travelers arriving from other nations are still a threat. The total number of cases in China so far is 80,860, with 3,213 deaths.
Supply Chain Impacts of the Virus
80% of the world’s trade volume is sent by sea, and shipping is being significantly impacted by COVID-19. China is home to seven of the 10 busiest container shipping ports, and many have been closed or limited for weeks.
Singapore and South Korea are also major shipping hubs, and have had similar restrictions. Manufacturers around the world are going to feel the impact of these trade interruptions, especially since container shipping is a primary way that goods are moved around the globe.
Ships can’t go to Chinese ports due to shutdowns. Other countries have also stopped and quarantined ships in order to avoid infection in their own nations. Goods are not able to get out of China, and that affects trade on everything from clothing to medication.
Nearly 75% of companies are reporting supply chain disruption due to COVID-19. The economic impacts of this level of disruption aren’t yet known, but will likely be in the billions of dollars. Companies with a diversified supply chain are far better equipped and are less likely to suffer significant losses.
How Businesses are Responding
Many companies are in a period of uncertainty, not knowing when recovery will start. The more nimble a supply chain can be, the better, of course. However, finding suppliers in unaffected nations is difficult with 127 countries impacted. This is especially true because even an unaffected supplier has to move goods through affected areas.
As a business, it’s vital to work with multiple suppliers and transportation companies. Diversifying your options can help to weather this crisis.
If Opus9 can be of any help during these trying times, please feel free to reach out to us.