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In January 2020, a new, deadly virus outbreak started in China. It didn’t take long for the pandemic to spread across the world. Modern logistics and travel allow people to travel anywhere in the world in a day.
Within days, social media was awash with pictures of Chinese people. They wore masks and Hazmat suits as they made their way to and from work. The coronavirus is not confined to Wuhan alone. After all, Canada trades goods across the world. Also it happens to be the US’ third-largest trading partner and it has already started impacting on the transportation industry.
The Pandemic
Foreign nationals made their way home from China in the early stages of the virus. Following this airlines started suspending Chinese flights. On top of this, freighters carrying shipments from China at sea waited for clearance, across the world.
Nationwide Auto Transportation has an independent comment from an household goods importer to South Africa. They had run out of stock due to the shipping delays. The company said that their ship was ordered to anchor outside the harbor. However it had to remain in a floating quarantined zone until a doctor had cleared everyone free from the coronavirus. Similar comments were made by individuals from around the world. This was also the case where people have been quarantined due to the high level of infectiousness of the disease.
Shipping affected
Major shipping companies (MSC Mediterranean Shipping, Maersk, CMA-CGM and Hapag-Lloyd) announced that they would reduce the number of vessels to the United States, Canada, West Africa and India.
On February 12th, it was announced that the coronavirus has spread much faster than the 2002 SARS outbreak. More than 1,000 official deaths have already been reported and more than 40,000 incidents of coronavirus in twenty-five countries. It is expected that these figures will continue growing.
Current Situation: How the coronavirus has already impacted on industries
The outbreak of the coronavirus coincided with the Chinese New Year holidays. This is a time when people travel far and wide on vacations or to visit family that live far away. The virus outbreak put a dampener on the early positive sentiments many markets had for 2020; markets that depend heavily on China’s trade. Economists expect that the extended industrial shut down will further shrink the country’s trade volumes. As a result
The coronavirus broke out in Wuhan, which is near the Yangtze River. It is one of the busiest waterways in the world, where, every year:
- in excess of two billion tonnes of cargo is transported;
- at least 80% of China’s inland marine traffic moves;
The province of Wuhan handles more than 1.5 million containers every year within seven of China’s ten container ports. They supply thousands of tons of crude oil, steel and coal.
Everyone is affected
Every shareholder in every business around the world that is involved in Chinese trade is affected by the coronavirus. The intra-Asian container shipping industry was the first to feel the effects of the coronavirus on trade. Following them, industrial production had slowed down, if not stopped altogether.
According to Reuters, airlines across the globe have suspended Chinese flights. American Airlines will suspend flights until March 27, while many suspended flights until March 31st, or until further notice. Air China said that it would adjust flights to the United States. UPS cancelled 22 flights to China. On top of this, Virgin Atlantic extended their suspension of daily operations to Shanghai until the end of March.
Restricted Movement
In addition to restricting the movements of individuals, the coronavirus has shaken the global economy. Especially for companies that rely on China’s efficient workforce and sophisticated factories. It is still too soon to assess the financial impact the virus outbreak had on the economy.
FedEx’s has agreed with the Air Line Pilots Association that they would allow crew members to decline flights to China. Similarly, UPS has made a similar agreement with the Independent Pilots Association.
Airline and shipping transportation suspensions have affected the global economy. However one might spare a thought for local truck drivers in China. They are not permitted to return to work as yet. These individuals are probably the most important cog in the proverbial logistics wheel. They have to ship goods to and from the various international ports. Until they are returned to the roads, there will be no first- and last-mile sea, air or rail freight. It is expected that this industry will be the hardest hit by the coronavirus.
And the longer the virus lingers, the bigger the impact it will have on the logistics industry.
Coronavirus’ Impact on the Automotive Industry
Manufacturing an automobile requires around 30,000 parts. With many factories already shut down in Asia, parts volumes have already been affected and production volumes continue to decrease. Most OEMs source new vehicle components from China. This is bound to lead to a global shortage of parts which will certainly increase the cost as demand soars.
Hyundai, the fifth-largest auto manufacturer in the world temporarily suspended production lines at its South Korean factories. This was in light of a shortage of parts that are supplied by China, as did Renault. Fiat Chrysler announced that the coronavirus outbreak could disrupt their production at a European plant. Following this, Volkswagen had also temporarily suspended production.
General motors is expected to be one of the hardest hit due to the construction of their supply chain. The auto manufacturer sells more vehicles in China than in the US. GM is expecting to return to production in China this week. However, production is bound to be impacted by the availability of materials. On top of this also the health of their workers, and the logistical infrastructure.
Wuhan and Coronavirus
Wuhan happens to be the epicenter of the automotive industry, with a 48.39% share in Wuhan and surrounding cities. The PSA Group, Dongfeng Motors and Honda have a significant presence in Wuhan. US automotive OEMs will probably be finding alternative suppliers of automotive parts. Perhaps from Japan and Europe – to mitigate their diminished supplies.
Consumers are bound to see scarcity and increases in costs pertaining to new vehicles and automotive parts. Stocks are already going down after a month or so. Once manufacturing plants are up and running again, the demand will increase. This will place additional strain on the industry, which is bound to lead to more demand than supply.
Amidst the economical and logistical impacts, it’s easy for some to ignore the human toll of the coronavirus. During this unsure time, our thoughts are with everyone affected by this deadly virus.
Let Nationwide Take You Places
While the virus may have quieted, the wheels of the transport industry continue to turn. At Nationwide Auto Transportation, our commitment to moving forward is stronger than ever. Whether you’re looking to transport a classic beauty from a recent auction, need door-to-door delivery for your daily drive, or want to ship your prized possession to a new location, we’ve got you covered. Our services are tailored to meet today’s challenges with safety, efficiency, and reliability.
Don’t let anything put your plans on hold. Explore our Door-to-Door Auto Transport, secure a special ride for your Classic Car Transport, or streamline your vehicle moves with our Auction to Dealer Car Shipping. Get your free quote today and join the ranks of our satisfied customers who trust us to deliver, pandemic or not.
