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Novel Coronavirus – The impact on Manufacturing and Trade

The novel coronavirus which is believed to have originated in a wild animal market in Wuhan (whose population rivals Detroit) when the virus made the jump from an animal to a human. From there, it has spread throughout China and thanks to the way humans travel nowdays far and wide by plane, it is rapidly appearing in places around the globe.

For a good map of reported cases, we strongly suggest this Johns Hopkins map here.

The impact on manufacturing and trade, however, has yet to be fully measured because this happened shortly before the Chinese Lunar New Year celebration when Chinese citizens returned to their home cities. Wuhan’s status as the originating point for the virus complicates things further because many factory workers originate from Wuhan or the surrounding cities in the province.

The Chinese government took the highly unusual step of extending the official celebration through this past Sunday while allowing individual provinces to extend even longer – many now through this weekend or more.

Factories are not opening because businesses are prohibited from opening and those trucks which are traveling through parts of China are either being stopped to have the driver and passenger’s identities and temperatures recorded, or we are hearing increasingly of blockades and road closures that are preventing even vehicular traffic from moving.

The three major domestic US airlines have suspended nearly all flights through the end of March because of a significant drop in passengers. European carriers such as British Airways, Iberia and Lufthansa have done the same. Hong Kong-based carrier Cathay Pacific has cut nearly 90% of their flights to mainland China.

For ocean freight, carriers who had already blanked sailings because of the lack of cargo from the holiday are now adding even more blank sailings. Maersk is allowing employees to work from home through the end of the month and other carriers are taking similar steps.

As we wait and see what the available air and sea cargo options shape up to be in the coming days and weeks, we encourage all our customers to remain in communication with their factories and their Chinese buyers. We, in turn, will remain in contact with our partners in China and communicate closely with our office in Hong Kong to keep everyone advised of the most current information.