Coronavirus - any news from your Chinese suppliers?
Discussion
For those of you who import from suppliers in China / Hong Kong, have you heard when they might be able to start shipping stock out (via air)? One of my suppliers thinks it will be this weekend, another says next week and a third has said 3 weeks at least before stock will start moving. They are based in Shenzhen mostly.
I was speaking to one of our Chinese suppliers today (Shenzhen). Apparently everyone is staying at home but they expect to be back in the office for Feb 10th.
I received an email from one of our UK suppliers earlier today, a well known UK importer who has advised they don't expect anything to be shipped from China until the end of MAY! Quite a statement.
I can see where this is going, expect backlogs, and stock being hoovered up in the UK causing shortages, meanwhile importers can't get their goods made quick enough to cover the shortfall in stock reserves here in the UK.
I received an email from one of our UK suppliers earlier today, a well known UK importer who has advised they don't expect anything to be shipped from China until the end of MAY! Quite a statement.
I can see where this is going, expect backlogs, and stock being hoovered up in the UK causing shortages, meanwhile importers can't get their goods made quick enough to cover the shortfall in stock reserves here in the UK.
Think it's going to start going downhill on the supply chain side from Monday. We have a lot of component supply in China feeding a Chinese factory almost 100% and various components to more than 20 other factories globally.
Until now our Chinese factory was saying that everything was fine. E.g. that the factories had planned to shut down a week either side of CNY so stocks wouldn't be affected. However now they have let us know a few details on places they know are locked down etc.
We can see our stock levels, know when we will start to run out... but we can't confirm what/when things will start up again after new year. Existing orders could get shipped, and we won't really know until they don't.
Off the back of that yesterday we identified that one of our biggest group suppliers is in a city that has been locked down.
We were already updating our forecasts every day for when we will start to run out... but tomorrow will double down on figuring out what is single sourced from that particular supplier and what we can easily start up in India etc (where we have a partially mirrored supply chain).
We have concerns that even if a factory has stock then our freight forwarders might not have logistics capacity, and people who were supposed to arrive in various places to do things won't materialise due to transportation problems.
Going to be interesting. I think it will start to kick off for us next week. Reduced output from multiple factories which could be millions of lost revenue. Yikes!
Until now our Chinese factory was saying that everything was fine. E.g. that the factories had planned to shut down a week either side of CNY so stocks wouldn't be affected. However now they have let us know a few details on places they know are locked down etc.
We can see our stock levels, know when we will start to run out... but we can't confirm what/when things will start up again after new year. Existing orders could get shipped, and we won't really know until they don't.
Off the back of that yesterday we identified that one of our biggest group suppliers is in a city that has been locked down.
We were already updating our forecasts every day for when we will start to run out... but tomorrow will double down on figuring out what is single sourced from that particular supplier and what we can easily start up in India etc (where we have a partially mirrored supply chain).
We have concerns that even if a factory has stock then our freight forwarders might not have logistics capacity, and people who were supposed to arrive in various places to do things won't materialise due to transportation problems.
Going to be interesting. I think it will start to kick off for us next week. Reduced output from multiple factories which could be millions of lost revenue. Yikes!
Edited by Glade on Friday 7th February 01:20
Most of our contacts are working from home, production rumoured to restart on Monday, but its China, so who knows.
We're quite lucky, had one container arrive last week and another due in a couple of weeks which should tide us over to late spring.
Freight rates will presumably go sky high for a few months.
We're quite lucky, had one container arrive last week and another due in a couple of weeks which should tide us over to late spring.
Freight rates will presumably go sky high for a few months.
We have implemented WFH for our China team until the 17th, but have been told be our factories that they will start production again from anytime between tomorrow and Monday. Im not overly optimistic personally, and fully expecting shipment delays for the coming weeks. Admin staff are WFH until 17th in all our factories we believe. Our provinces are pretty much all the coastal production ones. I understand FOXXCONN are already back to work - which is unusual as normally they dont stop!!
Feedback that not everyone expected to return to work has done... not much of a surprise.
In Shanghai there are restrictions for being in public or public transport (not too sure), and air conditioning is not allowed to he used in offices. They have run out of masks.
It's quite likely that even if suppliers can produce the travel restrictions will stop stock moving about so we're waiting to see what stops basically.
My Chinese colleague is usually the eternal optimist, but did not sound happy when we spoke today.
In Shanghai there are restrictions for being in public or public transport (not too sure), and air conditioning is not allowed to he used in offices. They have run out of masks.
It's quite likely that even if suppliers can produce the travel restrictions will stop stock moving about so we're waiting to see what stops basically.
My Chinese colleague is usually the eternal optimist, but did not sound happy when we spoke today.
My suppliers are saying holiday is extended until February 26... Initially they said production would resume on the 10th
This is quite the nightmare, as we've had a series of unusually large orders from people trying to 'hoard' in case of supply problems. With the news today that new cases are accelerating along with deaths, is not good news for me, or China
This is quite the nightmare, as we've had a series of unusually large orders from people trying to 'hoard' in case of supply problems. With the news today that new cases are accelerating along with deaths, is not good news for me, or China
Received an update from probably my most trusted and reliable Chinese supplier this morning. They now have no idea when they will return to work. There has been nothing in production since before their new year holidays. They are very worried about the impact to their business and understandably the potential health impact to themselves and their familiy if the virus spreads further.
For some sales I'm able to use a similar spec product from my European supplier although I'm talking a hit on margins. However the raw materials my European supplier uses come from China so they will have production issues soon as well.
Could this be a catalyst for a world wide recession? Worrying times...
For some sales I'm able to use a similar spec product from my European supplier although I'm talking a hit on margins. However the raw materials my European supplier uses come from China so they will have production issues soon as well.
Could this be a catalyst for a world wide recession? Worrying times...
Most of our factories around Taicang/Shanghai have gone back to work on a limited basis.
One of our QC guys is trapped in the Wuhan area lockdown... apparently you need to be approved to travel internally and have to self quarantine etc so moving QC staff around to factories is a nightmare for us atm... having to get the factories themselves to QC, which isn't ideal.
We are still having stuff costed as staff can do this from home over there, but orders and samples are obviously taking longer and there will be knock ons from this over the coming months i think.
I don't work on the sales side but as I understand it most of our customers have been pretty understanding, they are likely having the same issues.
One of our QC guys is trapped in the Wuhan area lockdown... apparently you need to be approved to travel internally and have to self quarantine etc so moving QC staff around to factories is a nightmare for us atm... having to get the factories themselves to QC, which isn't ideal.
We are still having stuff costed as staff can do this from home over there, but orders and samples are obviously taking longer and there will be knock ons from this over the coming months i think.
I don't work on the sales side but as I understand it most of our customers have been pretty understanding, they are likely having the same issues.
p_k_n said:
Could this be a catalyst for a world wide recession? Worrying times...
Asian stock markets have slipped a little but I'm amazed there hasn't been a much wider and sharper reaction on markets generally.Perhaps not so noticeable if you're not in a related industry, but it's quite a big thing that Mobile World Congress in Barcelona in a couple of weeks has been cancelled.
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