- Chinese New Year:
The annual holiday for many Asian countries will come later than it usually does, but even in times for Covid-19 it will have a major impact on manufacturing and production. Any supply chain that includes countries celebrating Chinese New Year will experience a shutdown of some kind during this period. The holiday officially runs from February 11th to February 26th this year. Shutdowns begin a week before the two-week long holiday and production will return to current levels by the end of February.
When production does finally begin to return, quality control is a lower priority for most factories. Additionally, job turnover is higher than normal following the holiday. Customs also comes to a screeching halt during the holiday stopping the export of goods and products that have already been produced. This can cause a shortage for companies that are not prepared.
To combat the impending shutdown many companies buy the necessary goods in bulk in the weeks leading up to the holiday, to limit the impact on their supply chains. In addition increasing inventory, we recommend implementing quality management of products coming from overseas. Also, communicate with the producer to receive a clear idea of what kind of inventory they can supply before the shutdown begins. Another option is reaching out to alternative suppliers that do not observe the Chinese New Year for the time of the shutdown. During these times of extreme supply chain instability, it never hurts to have other suppliers in your rolodex.
- January Spot Market Rates:
Thus far into January 2021, Truckload Spot Rates are surging, primarily for Dry Van and Refrigerated with a small increase for flatbed. While this isn’t completely uncommon, it is coming on the heels of rates that were already elevated. As imports increase to match the seasonal demand by those trying to stock up on product before the Chinese New Year, demand increases for trucks to move the goods from the ports to their final destinations. We will see the truckload market once again stabilize until the beginning of the produce peak season in a couple months.
- COVID Update:
Currently, the vaccine has only been administered to high-risk individuals and health professionals and unfortunately only a small percentage of those groups have had access to the vaccine. The Federal government left vaccine distribution up to states and many states are allowing local governments to create their own vaccine administration schedules. Unfortunately, the lack of a well-defined national plan has left most industries in the dark on when to truly expect the economy to move forward without fear of COVID. That is to say manufacturers, retailers, and the service industry to name a few are still unable to look forward with 30-60-90 day plans and accurately factor in the role COVID is still playing in the decisions of consumers. The best timetable we have to work off of right now are estimates from the CDC which are hopeful the general public will begin receiving the vaccine by the end of Spring and COVID will be mostly quelled by the end of Fall. In the meantime, health care supply chains will continue to carry some of the worst strain as COVID cases continue to climb daily. However, another major event notwithstanding, we do not expect any further disruptions to supply chains than we have already witnessed in the wake of COVID.