COVID-19: Cost of outbreak supersedes SARS by 20% at USD 2.8 Billion

Feb 17, 2020 | Article, News

As the battle against the COVID-19 pandemic continues, effects continue to be felt across the global supply chain with factories struggling to resume normal operations throughout China. Chinese media organisations have put forward March 1^st as the date production schedules could return to “near” normal operations. Re-opening of services across the country continue to vary depending on the severity numbers of COVID-19 cases within provinces. Inevitably, the cost of the outbreak is today nearing $2.8 Billion, surpassing the financial consequences felt by SARS in 2012, by 20%.

The global supply chain faces difficult decisions ahead as it endures continued stagnation of manufacturing and logistics. Multiple risks at hand include:

1. Lockdowns are causing labour and raw material shortages in factories
2. Regulatory uncertainty is slowing the restart of factory operations
3. Public health requirements impact industrial operations
4. Suppliers invoking force majeure clauses on the rise
5. Provincial border checks exacerbate trucking shortage
6. Closed boarders delay movement from and to Vietnam and Hong Kong
7. Labour shortage causes congestion at airports and seaports
8. Blank sailings reduce ocean freight capacity out of China
9. Limited air and rail cargo capacity to increase prices
10.Ripple effects are felt across supply chains

To assist supply chain managers initiate risk mitigation, please do not hesitate to contact the Uniserve Coronavirus Helpline team on 01375 851 346 or by emailing us at info@ugroup.co.uk