top of page
Search
  • Writer's pictureStephen Fodor

Monday Morning Wake Up Call – Feb. 24, 2020





Corona Virus Impact Still Being Strongly Felt


o Factories in China are still running at less than 30-40% of normal production capacity in many cases and the interconnectivity of the supply chain within China means that even as some factories get ramped up they may face an ongoing shortage of parts and components that could hamper their production capabilities.


o Many truckers in China are still struggling to move empty containers to factories and return them to the port terminals and this is causing further delays in making cargo available for shipping to the U.S.


o Many are predicting that the impact will not lessen greatly until after April 1st, just as the busier shipping season draws near.


Cargo Carriers Still Sailing “Blank” Sailings


o Many ocean freight carriers are still canceling sailings and rolling cargo from one week to the next as they struggle to deal with the decreased demand caused by the Corona Virus.


o Rates on the spot market have fallen however as factories come back on line expect rates to spike sharply as carriers try to recoup some of their recent losses.


o Carriers are expected to continue controlling the supply of container space in an effort to keep prices stable or even to justify increases.


The Backlog in Purchase Orders


o While the virus has had an immediate impact on production and shipping, demand remains high and many suppliers are reporting a large backlog of unfilled purchase orders. Once the virus’ impact lessens and factories are back up to near normal production levels expect the situation to remain quite unsettled throughout the first half of 2020.


Trade War and Corona Virus Push US Importers to Look at Sourcing Changes


o With the start of the trade war in 2018 a good percentage of U.S. importers began looking at sourcing options outside of China. The challenge has been to find other sources that aren’t themselves reliant on China-sourced materials and components and dealing with the inability for other nations’ factories to produce the quantity and quality of goods required.


o The shipping infrastructure in many nations is not up to the standard of China and the added costs and delays in sourcing outside of China have presented challenges of their own.


o As some sourcing has moved from China to other Asian nations the ever-present threat of increased tariffs on goods from those nations lingers. Comments made by members of the U.S. Administration have put a cloud of uncertainty over the global supply chain.


o Please contact us for further information or questions – info@tradelogicintl.com.

24 views0 comments

Recent Posts

See All

Subscribe to My Linkedin Newsletter

To help you keep up to date on topics the impact the U.S. international trade community, be sure to read my latest newsletter and subscribe for future updates too. https://www.linkedin.com/posts/trade

Section 301 Duty Exclusions Set to Expire on 12/31/23

Unless Congress acts quickly, the duty exclusions currently in place for certain products imported from China are set to expire on Dec. 31st. Importers who currently enjoy these exclusions on their pr

Duty Drawback Services Now Offered by CSS

Please visit our web page www.cssbrokers.com and click the link for Duty Drawback for more information. U.S. companies miss out on hundreds of millions of dollars in duty refunds, make sure your compa

  • Twitter
  • LinkedIn
  • Facebook
  • YouTube
  • Instagram

need assistance from a licensed CUSTOMS broker?

Thanks for submitting!

bottom of page