Press Room

NEOLINK Announcement – Coronavirus Update and Impact on Shipping from China – 17.2.20

Dear Valued Clients,

Given the continuing impact on the global economy the Coronavirus is having, I thought It was important to provide an update this morning.

The Coronavirus as I am sure you are all aware is having a significant impact on the global economy and is anticipated to have an impact on all countries gross domestic product this quarter.

I have provided a short breakdown below on how this is happening from a global logistics perspective and how this is impacting Supply Chains for you to share with your customers:

1. Factories Workers: the majority of factory workers in the south of china in particular are from other regions or provinces around the country. The mass migration of Chinese New Year has meant that the government has been forced to stop workers from returning to work and reduce the risk of the spreading of the virus. Situations vary depending on the province, but 99% of factories remain closed until today at the earliest and we are hearing that this may extend to the beginning of March depending on the provinces. Once workers to travel (if approved), they are being forced to stay confined in their apartments for up to a further two weeks before being allowed back to work.
2. Production: Simply without the factory workers, production times are being extended and delays are naturally going to occur across all industries
3. China Export Customs: Depending on the region for every ocean or air export from China needs to be processed by customs officials online and we anticipate that the lack of resource will create delays with China customs. In turn we anticipate this will create challenges with meeting sailing cut offs with the shipping lines and making vessels.
4. Shipping Lines: Due to the above; the shipping lines are forecasting blank sailings over the course of the next few weeks. Some services will still continue to run, but it is expected that transit times will extend if they are run at all. From a shipping lines perspective they will not move a vessel if it is only at a certain capacity – simply put, if there is not enough cargo they cannot justify moving the boats. Below is what we have confirmation of so far, but expect this to change ongoing over the coming weeks:

5. Local Importers Stock and Inventory Levels: Across our 100+ Customers that import from China there has not been 1 company that has not been impacted by the Coronavirus on their stock levels. Stock and Supply is being constrained, which in turn is impacting end customers here in Australia.

So what can we do and what is our recommended approach?

Control the controllables! Please ensure that the NEOLINK team are aware of ALL of your pending/upcoming purchase orders along with the factory and load this into the system (we will also proactively reach out). This will enable us to forward plan as much as possible and ensure that we can work with the carriers to manage accordingly. Please DO NOT hold onto orders and then approach us at the last minute expecting a booking – our team will do our best in this situation, but there is a higher risk with this approach in delays occurring. Please leverage the Purchase Order Manager Service we offer (free of charge and part of our offering) and let us manage/prebook accordingly.

Despite our above recommendation there is still a high probability of delays occurring across all carriers and ports in the coming weeks, so please manage your customers’ expectations accordingly. Alternatively; Chris and I are also have to speak directly with your customers to answer any direct questions they might have if they want a bit more insight into what is occurring.

Best regards,

NEOLINK Marketing Team