Covid-19 and Global Travel

The COVID-19 coronavirus is going to have a major impact on the global economy, this is now undeniable.

We discussed the various impacts of the virus around the world in our last blog, “Covid-19 Affecting Your Supply Chain?”

While the pandemic affects everyone—individuals and companies alike—one of the hardest hit industries is travel. From business to personal and local to international, basically all international travel has come to a screeching halt.

When the virus first hit China, it had obvious impacts on the China supply chain. However, now the tables have turned: the virus is now spreading throughout the world and China is slowly returning to business-as-usual. We are now presented with a new set of challenges: Chinese manufacturers can produce, but sales for companies throughout the world have been reduced and companies are plagued with a feeling of market uncertainty .

What does this mean for the global economy? How can we turn this unprecedented threat into an opportunity?

As all experienced importers know, optimal sourcing from China takes time and careful management and planning. Even though business might be slow at home, companies can still take advantage of the extra down time at home to elevate their sourcing abroad.

Supply chain management involves traveling, a lot more traveling than you may have thought. Not only are buyers traveling to China to meet suppliers, but suppliers are also traveling to the USA to meet buyers.  And there are Asian suppliers traveling to and from China to deal with merchandise that ends up right here in the USA.  Not to mention Chinese suppliers who need to travel domestically and meet with other factories within China.

Travel moreover, is usually done by air.  It is faster and more efficient that way.  But for the next few months it appears that there will be a 14 day quarantine requirement going into any country – China, Europe or the USA.   Thus a trip to or from China would take at least 1 month (2 times 14 days) with only a couple of days for face to face meetings. That is not practical.  So how would one manage without travel?

Having a sourcing team with local representatives can help keep your business operational during this global epidemic.

In a recent blog, “The cost of doing nothing”, we discussed the many benefits of having a sourcing team to manage an importer’s supply chain. Now more than ever, when international travel is becoming a huge problem, good communications across distances and culture become essential and having a reliable China sourcing team in place is even more valuable.

For example, our own China office has offered the following benefits:

• We have been able to compensate for travel restrictions by frequently communicating with suppliers and manufacturers using phone and WeChat to supplement emails.
• Maintaining close interaction with suppliers during all stages of the supply process provides a much clearer understanding of the real situation and better control for our clients.
• Conferences, exhibitions and expos around the world have been canceled, depriving importers of this important resource, and further disrupting the supply chain. Yet our team has continued to find and qualify new suppliers and develop new products and ideas using communication and delivery tools.
• Many orders experienced manufacturing delays and setbacks, but our team was able to provide our clients with real-time, accurate information about production and delivery timetables.

Although travel plays an integral and important role in supply chain management, travel restrictions do not have to cripple an importer’s business.  Travel always had to be supplemented by on-site follow-through. Absence of travel means follow-through has to be guided at a distance and, thus, require a higher level of communication and operation standards.  But it can be done. If there was ever a reason to depend upon a reliable China sourcing team, that time is now.

 

By Jocelyn Trigueros