Coronavirus Effect on Supply Chains

Coronavirus Effect on Supply Chains

The coronavirus disease 2019 (COVID-19) is upending global container volume demand and rippling through containerized supply chains.  That's sending shockwaves to all freight transport modes, from trucking to air cargo. 

The widening impact COVID-19 is having on retail and manufacturing demand is creating the need for two importing speeds. Cargo owners such as apparel and automotive importers want to delay receiving goods for now-closed brick-and-mortar stores and production lines, whereas importers shipping personal protective equipment (PPE) and essential household consumer goods want them faster.  Against that backdrop, carriers, forwarders, port authorities, and marine terminals are warning of a cargo bottleneck if more Western importers fail to pick up containers when they arrive, causing port congestion and inland equipment shortages that will slow down the broader supply chain.

Bookmark this special page for regular updates on how the industry is responding.

News & Analysis

01 Jun 2020
A collapse in US exports of scrap paper and forest products due to tariffs, environmental restrictions, and slowing economies in receiving countries is expected to continue this year due to the effects of the COVID-19 crisis.
29 May 2020
Spot container rates spiked from the previous week as retailers replenished diminished inventories and after capacity has been reduced through dozens of blank sailings in May.
29 May 2020
After spiking in March owing to increased demand for essential goods amid the COVID-19 pandemic, truck detention has receded but remains a disruptive factor for truckers that can backfire on shippers when capacity is needed.
29 May 2020
Extensive capacity cuts on the Asia–Europe and Asia–Med trades are holding up container spot rates, and some carriers are even announcing rate increases in May and June.
29 May 2020
As intra-Asia volumes seek to find their footing amid COVID-19, the mounting war of words over China’s initial handling of the coronavirus outbreak could result in a shift of multinational manufacturing from China to other regional players.
29 May 2020
The main concern for US resin producers in 2019 was an increase in Chinese import tariffs, but that has been overshadowed by macro-economic concerns during the COVID-19 pandemic.
28 May 2020
Spot truckload rates are inching up as the reopening of many businesses shifts cargo, and capacity, to the contract market. That’s tightening spot capacity as loads increase.
28 May 2020
Carriers say container booking cancellations, and the failure of importers and exporters to notify them of the cancellations, are contributing to supply chain disruptions during the coronavirus disease 2019 (COVID-19).
27 May 2020
Containerized agricultural exports surged in the first quarter over the year-ago period when China’s tariffs on many US commodities crushed ag exports to China.
27 May 2020
With the US imposing higher tariffs on goods from China, importers of household goods moved production to Southeast Asia last year, primarily Vietnam.
27 May 2020
A wave of government support measures and the rising threat of overcapacity speaks to the pain on the way, even if carriers have shown they’ve learned from the 2008-2009 global financial crisis not to pull punches when it takes to cutting capacity quickly.
27 May 2020
A Salesforce-based logistics software provider has established a critical goods network to link suppliers, buyers, and 3PLs that wouldn’t ordinarily be connected to one another.
26 May 2020
Produce shipments from western and southern US states provoked a refrigerated spot rate spike in May, and some truck shortages in California.
26 May 2020
Increased import tariffs on Chinese-made toys in 2019 caused some shippers to shift sourcing to Vietnam, accelerating the diversion of those cargoes from Los Angeles and Long Beach to ports on the East and Gulf coasts.
25 May 2020
Blank sailings are making it difficult for ag shippers and truckers to make appointments for delivering export containers to marine terminals, and they are experiencing additional supply chain costs as well.
25 May 2020
With schools and retailers shut down across the country, imports this summer of back-to-school items and holiday season goods may be much lower than in prior years.
22 May 2020
Cargo owners argue the waiver on port storage fees will ease the the container backlog at Chittagong marine terminals, but some shipping agents disagree.
22 May 2020
As countries across Europe and North America begin to emerge from lockdowns that in some cases have been in place since early March, attention in the air cargo industry is shifting to the recovery phase.
22 May 2020
Nearly five months into 2020, US agricultural exporters say their main concerns are logistical issues such as blank sailings in the trans-Pacific, ocean carrier detention and demurrage charges, and supply chain disruptions due to “earliest return date” (ERD) mandates.
22 May 2020
Tightening truck capacity will collide with rising freight demand by 2021, flipping pricing power back to truckers next year, Coyote Logistics predicts, but consumer behavior is a wild card.
22 May 2020
Congressional representatives of New York and New Jersey this week sent a letter to House and Senate leaders in support of $3 billion in financial aid for the Port Authority of New York and New Jersey.
21 May 2020
Domestic intermodal volume in April suffered its worst month in eight years because of the COVID-19 pandemic, with intermodal marketing companies saying May might end as poorly, if not worse.
21 May 2020
Carriers appear to be in a better position to shrug off the demand declines of the second quarter and capitalize on recovering volume through the rest of the year.
21 May 2020
The savings afforded by the safe harbor tax credit has US solar energy developers rethinking traditional project logistics processes, purchasing and importing materials much earlier in the construction cycle.
20 May 2020
Among the many questions facing the auto industry in 2020 is how to build resilience into supply chains centered on just-in-time (JIT) fulfillment strategies and lean manufacturing.
20 May 2020
Amid COVID-19 fears and lockdown-driven economic difficulties, domestic migrant workers employed at key Indian port locations have been heading back to their home provinces, severely hampering maritime trade.
20 May 2020
A small number of sailings have been reinstated on the trans-Pacific and Asia-Med trades as economies take their first small steps toward reopening and carriers try to get the supply-demand balance right.
20 May 2020
Comcar’s bankruptcy is a transfer rather than elimination of capacity, with new owners buying its subsidiaries and assets.
19 May 2020
Cargo interests report a surge in cargo rolling at Chinese ports, which they attribute largely to unprecedented capacity reductions by carriers for this time of year.
19 May 2020
The number of passenger planes flying in all-cargo roles has risen past 1,200 as carriers try to utilize their grounded fleets and generate revenue amid coronavirus-driven travel bans.
18 May 2020
Any concerns about the availability of IMO 2020–compliant fuels have evaporated because COVID-19’s hit on road and aviation fuels has left the global refining complex awash in low-sulfur feedstocks that are finding their way into the bunker market.
18 May 2020
The spot market rates are well above year-over-year levels, despite an evaporation of demand that has hit carriers hardest this second quarter.
18 May 2020
Stay-at-home orders and travel bans removed virtually all passenger traffic from cross-channel ferries, eliminating a crucial revenue source and threatening the transport of essential goods between the UK and Europe.
18 May 2020
Expectations for capacity, demand, and pricing across transportation modes in 2020 have been shattered by the COVID‑19 pandemic, resulting in recession.
15 May 2020
Produce season and the reopening of some states to business are beginning to jump-start truck demand and spur higher spot rates in some lanes, but a long recovery is forecast.
15 May 2020
The impact of the US–China trade war and COVID-19 has resulted in a 7.8 percentage point drop in China’s market share of US imports from Asia through the first four months of 2020.

Commentary

With so many products currently subject to Trump administration tariffs, a huge portion of entries from China will not be eligible for CBP's recently announced COVID-19-related duty deferral program.