Coronavirus delays international shipments amid closures and quarantines
Efforts to slow outbreak of disease also hamper supply chains as airlines cancel flights, container ships see delays, factories stay shut for extended Chinese New Year.
Retailers and other shippers are bracing for supply chain delays on goods moved in and out of China as a growing number of airlines and ocean carriers freeze operations across the country's borders in the wake of a deadly virus outburst that has already killed scores of people and sickened thousands.
Thought to have originated in the wild animal food markets of the country's Wuhan city, the coronavirus causes pneumonia-like symptoms and is similar to the severe acute respiratory syndrome (SARS) virus that killed hundreds of victims in 2003 and was also sparked by human consumption of wild game in China.
In an effort to slow the flow of people and contain the outbreak by reducing the spread of infections, the Chinese government on Monday announced it had extended its traditional Chinese New Year (CNY) holiday through Feb. 2 in most places and through Feb. 9 in more affected regions such as Shanghai, Ningbo, Hangzhou, and Suzhou.
That move is significant for supply chains because workers in Asian countries such as China, Vietnam, and Korea traditionally celebrate the Lunar New Year by traveling to spend time with their families. That mass movement has already shut down factories and warehouses throughout the region, so extending the holiday will likely prolong delays in producing and delivering goods worldwide.
In addition to broad government policies, individual companies have also responded to the virus by changing their specific shipping schedules. Ocean carriers have said ports are still operational, but that customers should expect delays, according to an update to clients sent by Noatum Logistics, an Overland Park, Kansas-based freight forwarder.
For example, the container fleet giant Evergreen Marine Corp. has reported that all its terminal ship-side operations are normal except for Wuhan, the city where the virus originated, Noatum said. Evergreen's feeder service in and out of Wuhan and local terminal operations in Wuhan are both temporarily shut down due to the quarantine. Shipments already in route will be idled at other ports until the lockdown is lifted.
Commercial airlines are reacting likewise, with United Airlines saying it has canceled 24 flights between the U.S. and China during the first week of February, and British Airways canceling others.
In terms of the virus' impact on specific companies, the quarantine on Wuhan will have a ripple effect on corporations around the globe because the city is an important manufacturing center, ranking 13th of 2,000 cities in China that host factories, according to Bloomberg News. Overall, the city's province of Hubei is the seventh largest of 32 jurisdictions, containing 44 facilities run by U.S. companies and 40 more operated by European ones, including PepsiCo Inc. and Siemens AG, Bloomberg said.
On Monday, FedEx Express shipped more than 200,000 surgical masks and personal protective equipment such as gowns and gloves to its Asia Pacific Hub in Guangzhou, China to assist the response work of the humanitarian aid organization Direct Relief. To move the goods from the air hub to affected regions, FedEx is working closely with China Post, which will deliver the aid from Guangzhou to Wuhan Union Hospital, the company said.
"FedEx is proud to mobilize its global network to deliver aid, comfort and care to people suffering in the wake of this unprecedented health emergency," FedEx President and COO Raj Subramaniam said in a release. "We will continue to work closely with humanitarian and disaster relief organizations to provide support and deliver supplies, doing what we do best to help those who need it most."
On Monday morning at CSCMP’s 2024 EDGE Conference, Darcy MacClaren, chief revenue office, digital supply chain, at technology company SAP, lead a lively discussion with a panel of women supply chain leaders on how to recruit, retain, and empower future supply chain leaders.
Panelists included Cindy Cochovity, executive vice president of strategic development at software company FreightPath; Heather Dohrn, chief commercial officer at trucking company Dohrn Transfer Company; Jennifer Kobus, senior vice president of supply chain planning and operations at retailer Ulta Beauty; Ammie McAsey, senior vice president of customer distribution experience at pharmaceutical company McKesson; and Michelle Williams, a supply chain teacher at Clyde C. Miller Career Academy, a high school in St. Louis, Missouri.
Touching on more than just the challenges they faced in supply chain as women, the panelists spoke about creating “destination" companies—places where top talent can work, grow, and thrive. According to MacClaren, younger workers “want more than just competitive compensation—they want to feel appreciated, involved, and inspired. They seek a workplace with a strong, inclusive culture that aligns with their values, offers meaningful work, and provides an opportunity for growth and development.”
The panel covered an array of topics including how to inspire the next generation of talent, strategies for engaging and coaching young professionals, how to attract diversity, and how to address change management. In addition, they shared personal experiences that helped them achieve their leadership roles and ended with some key takeaways for the audience members.
Here’s a snapshot of action items from the discussion:
1. Ensure a diverse slate of candidates for open positions.
2. Leverage internal and external networks to find diverse candidates.
3. Nurture and mentor new hires to help them thrive.
4. Remain authentic, vulnerable, and transparent as a leader.
5. Advocate for yourself and your career progression, not just for your team.
6. Seek out mentors and advocates, especially other women in leadership positions.
7. Open doors and bring others in, regardless of your own position.
Supply Chain Xchange Executive Editor Susan Lacefield moderates a panel discussion with Supply Chain Xchange's Outstanding Women in Supply Chain Award Winners (from left to right) Annette Danek-Akey, Sherry Harriman, Leslie O'Regan, and Ammie McAsey.
Supply Chain Xchange recognized four women who have made significant contributions to the supply chain management profession today with its second annual Outstanding Women in Supply Chain Award. The award winners include Annette Danek-Akey, Chief Supply Chain Officer at Barnes & Noble; Sherry Harriman, Senior Vice President of Logistics and Supply Chain for Academy Sports + Outdoors; Leslie O’Regan, Director of Product Management for DC Systems & 3PLs at American Eagle Outfitters; and Ammie McAsey, Senior Vice President of Customer Distribution Experience for McKesson’s U.S. Pharmaceutical division.
Throughout their careers, these four supply chain executive have demonstrated strategic thinking, innovative problem solving, and effective leadership as well as a commitment to giving back to the profession.
The awards were presented at the Council of Supply Chain Management Professionals (CSCMP) annual EDGE Conference in Nashville, Tenn. In addition to the awards presentation, the leaders discussed their leadership philosophies and career path during a panel discussion at the EDGE conference.
The surge of “nearshoring” supply chains from China to Mexico offers obvious benefits in cost, geography, and shipping time, as long as U.S. companies are realistic about smoothing out the challenges of the burgeoning trend, according to a panel today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Those challenges span a list including: developing infrastructure, weak security, manual processes, and shifting regulations, speakers said in a session titled “Nearshoring: Transforming Surface Transportation in the U.S.”
For example, a recent Mexican government rail expansion added lines to tourist destinations in Cancun instead of freight capacity in the Southwest, said panelist Edward Habe, Vice President of Mexico Sales, for Averitt. Truckload cargo inspections may rely on a single person looking at paper filings on the border, instead of a 24/7 online system, said Bob McCloskey, Director for Logistics and Distribution at Clarios, LLC. And business partners inside Mexico often have undisclosed tier-two, tier-three, and tier-four relationships that are difficult to track from the U.S., said Beth Kussatz, Manager of Northern American Network Design & Implementation, Deere & Co.
Still, dedicated companies can work with Mexican authorities, regulators, and providers to overcome those bottlenecks with clever solutions, the panelists agreed. “Don’t be afraid,” Habe said. “It just makes sense in today’s world, the local regionalization of manufacturing. It’s in our interest that this works.”
A quick reaction in the first 24 hours is critical for keeping your business running after a cyberattack, according to Estes Express Lines, the less than truckload (LTL) carrier whose computer systems were struck by hackers in October, 2023.
Immediately after discovering the breach, the company cut off their internet, called in a third-party information technology (IT) support team, and then used their only remaining tools—employees’ personal email and phone contacts—to start reaching out to their shipper clients. The message on Day One: even though the company was reduced to running the business with paper and pencil instead of computers, they were still picking up loads on time with trucks.
“Customers never want to hear bad news, but they really don’t want to hear bad news from someone other than you,” the company’s president and COO, Webb Estes, said in a session today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
After five or six painful days, Estes transitioned from paper back to computers. But they continued sending clients daily video updates from their president, and putting their chief information officer on conference calls to answer specific questions.
Although lawyers had advised them not to be so open, the strategy worked. It took 19 days to get all computer systems running again, but at the end of the first month they had returned to 85% of their original client list, and now have 99% back, Estes said in the session called “Hackers are Always Probing: Cybersecurity Recovery and Prevention Lessons Learned.”
As the final hours tick away before a potential longshoreman’s strike begins at midnight on the U.S. East and Gulf coasts, experts say the ripples of that move could roll across the entire U.S. supply chains for weeks.
While some of the nation’s largest retailers were able to pull their imports forward in recent weeks to soften the blow, “the average supply chain is ill-prepared for this,” Tom Nightingale, the former CEO of AFS Logistics, said in a panel discussion today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Despite that grim prognosis, a strike seems virtually unavoidable, CSCMP President & CEO Mark Baxa said from the stage. At latest report, the White House had declined to force the feuding parties back into arbitration through its executive power, and a voluntary last-minute session had failed to unite the International Longshoremen’s Association (ILA)’s 45,000 union members with the United States Maritime Alliance that manages the 36 ports covered under their expiring contract.
The ultimate impact of a resulting strike will depend largely on how long it lasts, the panelists said. With a massive flow of 140,000 twenty foot equivalent units (TEUs) of shipping containers moving through the two coasts each week, each day of a strike will require 7 to 10 days of recovery for most types of goods, Nightingale said.
Shippers are desperately seeking coping mechanisms, but at this point the damage will add up fast, whether a strike lasts for an optimistic “option A” of just 48 to 72 hours, a pessimistic “Option B” of 7 to 10 days, or even longer, agreed Jon Monroe, president of Jon Monroe Consulting.