In recent blogs we have discussed how higher tariffs and the COVID-19 outbreak worldwide will affect the prices and availability of necessary manufactured goods such as staples and nails. In this blog we will talk about the current logistics challenges and why problems with international shipping by ocean or by air look like they are not going away anytime soon.
The Current State of International Shipping
Anything we state now about shipping is subject to change weekly, daily, and sometimes even hourly. The COVID-19 virus and China’s regional shutdowns in manufacturing areas greatly affected production of goods earlier in 2020. As China’s people have recovered from the coronavirus, production has too. Right now their production levels are about 70-75% of normal, and exports have resumed and are increasing too.
The earlier shipping deficits in February and March, combined with an expected increase in demand in April and May, are going to create some problems. Shipping rates have increased and will continue to increase. There’s also a large imbalance in shipping container supply because China’s imports collapsed in February, so there are few containers in the U.S. and Europe presently.
President Trump closed travel from Europe to the U.S. in order to fight the advance of the coronavirus, but that decision has caused massive disruption to transatlantic air freight. Without passenger flight service, air freight will have to go through freighter airport hubs, and this will be more expensive and result in more delays.
Domestic logistics are also tricky right now. There were already trucker shortages in the U.S. Some companies are having to store goods longer than usual because they cannot be immediately shipped domestically from ocean ports.
The COVID-19 Outbreak Continues to Complicate
As the COVID-19 virus has spread to Europe and the U.S. it only makes shipping challenges more complicated. Italy locked itself down entirely last week. Areas of the U.S. like the San Francisco Bay Area are also locking down. In these areas cargo flow slows to a halt. It’s uncertain how many countries will institute lockdowns or what the rules of those lockdowns will be. Currently in the U.S. all terminals and airports continue to be operational, but that is subject to change at any given time.
It’s hard to predict exactly what will happen with international shipping under these circumstances except to say that resources will be scarcer than usual and shipping costs much higher. That is guaranteed to affect consumer prices on goods and services.
At Bond Products we want to be open about how the current challenges to the market affect us and, by extension, our customers. We are affected by the mandates of the City of Philadelphia and the State of Pennsylvania, but, unfortunately, these mandates are not the same, so the situation is confusing. At this time we are monitoring both and keeping our business open as we have fewer than 50 employees and are considered in part a hardware store and manufacturer. This may change, of course. If you have any questions about prices or availability of any of our products, please do not hesitate to contact us at 1-888-800-BOND. We will be happy to share with you what we know.