Developing a cogent supply chain response to the coronavirus outbreak is extremely challenging, given the scale of the crisis and the rate at which it is evolving. So far, less than 0.0008 percent of the humans on Earth have been diagnosed with the disease caused by the coronavirus known as COVID-19.
The recent Coronavirus outbreak in China has led to a global health emergency by the World Health Organization and it is yet to be seen how long the phenomenon will last compared also to the SARS outbreak in 2002.
“While the global economic impacts on the port and maritime industry from the coronavirus outbreak are significant and growing, the human impacts are our greatest concern. Since ports are a nation’s first line of defense against threats ranging from terrorism to pathogens, they take their role seriously about protecting the safety and well-being of their communities.
The current situation has affected various businesses and industries around the globe and especially the shipping industry. The outbreak has knocked what was a positive sentiment during the start of the year across all sectors and disturbed the markets worldwide. The markets that are deeply dependent on China’s trade have been heavily affected, while the outbreak came to a period concurrent with the Chinese New Year holidays. The extended period of China’s shutdown has shrunk trade volumes worldwide and freight rates across all sectors have plummeted. It is safe to say that economic distress will affect China’s economic growth for the first quarter of 2020 and the annual GDP growth as well.
To say the least, these are not good signs, given that the 2019 freight market, in general, did not come all that close to matching the impressive output seen in 2019, and that was well before any talk of coronavirus came to light.
Chris Connor, AAPA’s President, and CEO said “things will rebound eventually,” and he’s been hearing news about factories that are coming back on-line in China, and ports there ramping back up to move the cargo.
“At the same time, supply chain managers around the world are working tirelessly to keep cargo moving to ensure that the goods we need are available when and where we need them,” he concludes.
It’s impossible to anticipate the arrival of global crises such as the coronavirus outbreak, but firms can mitigate their impacts by taking supply chain preparedness to a higher level. They should act before a disruption occurs and adjust and execute new plans afterward rather than starting from scratch every time they are plunged into a new crisis.
Source: www.logisticsmiddleeast.com, hbr.org, www.theatlantic.com, www.supplychaindigital.com, www.mhlnews.com