Coronavirus impacting local supply chains

The novel coronavirus (COVID-19) has not yet affected the health of anyone within the borders of The Bahamas, but some businesses are already feeling the strain on their supply chain from the shutdown of industry in China. Meantime, an Economist Intelligence Unit (EIU) report suggests China could have the virus under control by the end of March.

Administrative Manager at Melissa Sears Co. Asantae Williams told Guardian Business yesterday that the store has already had to cancel some orders that were coming from China, because manufacturers could not determine when they would get back to work.

Williams added that she is expecting a small shipment from China and the very idea of the virus has made her anxious.

“I actually had to cancel some orders and I have a small shipment coming in that I’m scared to touch,” said Williams.

“We are having issues on the fashion side. It’s kind of held up all over the world, so even if we decide to get things from the U.S., they are getting their stuff from China. Everything is kind of getting held up in the industry because of the virus.

“I had placed this order a while ago, but because of the virus, they weren’t able to process it and their date to return to work kept getting pushed back, because they can’t really say for sure when they would be able to go back and resume normal business activity, so I had to cancel.”

The EIU has placed COVID-19 on its top five risks to the global economy in 2020, developing a report on its findings.

The report explains that COVID-19 is expected to have a greater impact on the global economy than severe acute respiratory syndrome (SARS) did in 2003.

“Our baseline scenario, based on a range of assessments by medical professionals, is that the public health emergency within China will be under control by end-March,” the report states.

“At this point, the government will lift quarantine measures and economic activity will normalize. We assume that the Chinese government will also implement strong fiscal and monetary stimulus to engineer a recovery in economic expansion, resulting in a rebound in growth in the second half of the year, both in China and worldwide.

“We assess a 20 percent probability that the virus will not be contained in China until mid-2020, and a 5 percent chance that it will remain uncontained beyond 2020. In the latter worst-case scenario, the economic impact would be much deeper and more persistent. Disruption of international trade would become entrenched as supply chains are diverted from China, with some countries possibly placing heavy restrictions on bilateral trade.”

Easy Car Sales Partner Pia Farmer said there was a short delay in her company’s electric car supply from China because of the virus, but she told this paper that shipments are expected to soon resume.

“We had expected and were prepared for a break for their Chinese New Year/Spring Holiday until Monday, February 10, so a lot of business had been sorted before they closed for their holidays,” Farmer said.

“Most people went back to work from home at that time, so we were able to connect remotely and there was little disruption. We received confirmation today (yesterday) that export shipments will resume shortly, there is obviously some backlog.

“The factories were the last to get on stream. Most have started production outside the worst hit areas and new orders are being accepted. In summary, there has been a short delay but it should not have a major effect, as shipments were already on their way before the virus hit.”

Chief Executive Officer of the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) Jeffrey Beckles said yesterday that not many companies have complained to his body of a drastic breakdown in their supply chain due to COVID-19, but he also contended that many Bahamian businesses do not heavily rely on China and some have back-up suppliers in Panama, Cuba, the United States or Canada.

“For the most part, there is no overemphasis on supply shortage,” he said.

“When we look at the global movement of goods, obviously there is a slowdown globally, manufacturing in China has slowed tremendously, [manufacturing] in that region has slowed significantly, which is going to affect the movement of goods everywhere around the world.

“And it is only a matter of time before that supply chain looks more like it’s drying up and it will then have a knock-on effect on countries like ours, obviously in the United States, which is a large market for Chinese imports; Canada and other jurisdictions.

“If there are local companies that have been transacting with China and are feeling the pinch, there may be some, but they are not speaking that loudly.”

Williams said Melissa Sears is “having a hard time” at the moment because the store should be in the process of restocking new fashions, but China’s partial shutdown is having an impact.

“I’m having a hard time right now because it’s time for us to have new stock in the store, but I’m having a hard time in terms of placing an order because I’m limited and the styles are a bit dated because there is nothing new being produced, so I’m limited in what I could choose from,” she said.

“It has me stressed but there is nothing I can do on my end.”

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Chester Robards

Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian. Education: Florida International University, BS in Journalism

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