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Webinar on the Impacts of the COVID-19 on Logistics and Supply Chains

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Page 1: Webinar on the Impacts of the COVID-19 on …...20/03/2020 6 Connecting worlds. Agenda •Current impact on domestic and international logistics and supply chain •Alternative solutions

Webinar on the Impacts of the COVID-19 on Logistics and Supply Chains

Page 2: Webinar on the Impacts of the COVID-19 on …...20/03/2020 6 Connecting worlds. Agenda •Current impact on domestic and international logistics and supply chain •Alternative solutions

Supported by:

Page 3: Webinar on the Impacts of the COVID-19 on …...20/03/2020 6 Connecting worlds. Agenda •Current impact on domestic and international logistics and supply chain •Alternative solutions

SpeakersGlenn BaiManaging Director ChinaMilitzer & Muench International Freight Forwarding

Jing WangBusiness Development Manager, Sustainability ServicesSGS-CSTC Standards Technical Services

Supported by:

Chen Liu [Moderator]Vice-President & Nat. representative,SwissCham Shanghai

Managing Director ChinaWeidmann Electrical Technology

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Corona Virus Disrupting Logistics & Supply Chains

Supported by:

Glenn BaiManaging Director ChinaMilitzer & Muench International Freight Forwarding

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Militzer & Münch: Connecting worlds.

Corona Virus

Disrupting Logistics & Supply Chains

March 20, 2020

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Connecting worlds.

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Connecting worlds.

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Connecting worlds.

Agenda

• Current impact on domestic and international logistics and supply chain

• Alternative solutions & strategies

• Case study

• Forecast

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Current Impact: Sea Freight

• Permits to resume the work

• Port storage charges (containers stuck)

• Port congestion fees US$1000-1500 per reefer container

• Voyage cancellations

• Entire Asia – Europe / USA route cancellations

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Current Impact: Air Freight

• Many passenger flights cancelled

• Freighter flights reduced (low demand)

• A lot of charter flights cancelled

• Capacity drop of approx. 65% vs 2019

• Limited staff on duty (40-50%)

• Large rate increases

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Current Impact: Rail

More favorable but still:

•Overbooked capacity, long waiting time

• GRI increase to 300 USD per 40’

• Wuhan closed as a departure platform

• Lower departure frequencies

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Current Impact: Trucking

• Whole province locked (Hubei)• Severe delays & backlogs (limited

trucking, permits, quarantine for drivers)• Overall working better again• Domestic express services fairly

uninterrupted (again)• Rate increases especially across

provinces

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Connecting worlds.

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Alternative Solutions and Strategies

Shortage of inland trucking:

• Inland rail • Inland river barges

Shortage of international sea and air freight:

• International rail• Hubs for receiving and distribution• Air (part) Charters• Multiple gateways (PEK, PVG, SZX/HKG) for diversification

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Case Study

•Automotive spare-parts company export from China via air & ocean freight•Urgent shipments go with air freight (to be avoided due to high costs); “regular shipment” via ocean freight (LCL & FCL 20” container)•Disruption and high costs in air and ocean freight lead to using rail freight with approx. CN-EU 19 days transit time•Adjust delivery time (trucking) of spare parts from supplier to rail platform, balancing of cargo in container•Consolidation of not-so urgent spare parts as 40” container for rail freight only•Pre-pare documentation required for customs clearance•Implement SOP (responsibility & escalation, operations, documentation & reporting) •Use GPS tracking device to benchmark transit times & other data during transport

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Forecast

•China seems to be currently relatively in a better position but only part of global supply chains•With EU and US in lock-down mode more interruptions in global supply chains expected•Likely large back-logs at ocean ports•Lack of capacity on CN-EU rail freight•Logistics costs will likely continue to rise •Major fall-out of airlines possible depending length Covid-19 crisis •Rethinking of global supply chains in the future or back to old ways when the

crisis is over ???

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Let us talk!

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Build a sustainable and resilient supply chain

Supported by:

Jing WangBusiness Development Manager, Sustainability ServicesSGS

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Build a sustainable and resilient supply chain

CERTIFICATION

INTELLIGENCE

ACTIVATION

SGS

Jing Wang 2020.03.20

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CONTENTS

Various disruptions to supply chain

Short-term solution and Mid/Long-term strategies

Case Study

Forecast

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01Di r p ion from

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Till Feb 21

Issued

3325Certificates

Contract value:

270BillionCNY

COVID-19

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HOW COVID-19 IMPACT SUPPLY CHAIN

Materials Labor

Supply shortages of materials or finished goods coming from or routed through logistical hubs in impacted areas

White- and blue-collar labor may not be available due to quarantine guidelines or illness.

Established hubs and supply networks may experience limitations in capacity and availability

Consumers may be more cautious in their purchasing habits due to fears about being in public and potential exposure to the virus

Travel may be restricted to certain areas, limiting the ability to discover, qualify and certify new business or programs and to transact business.

LogisticsSourcing Consumers

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GLOBAL SUPPLY CHAIN IN CHINA

94%Tier 2 supplier

16%Tier 1 supplier

Have Tier 1 supplier in China

163 companies

Have Tier 2 supplier in China

938 companies

Among Fortune 1000,

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10© SGS SA 2017 ALL RIGHTS RESERVED

2019 TOP 10 SUPPLY CHAIN RISKS

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CONTENTS

Various disruptions to supply chain

Short-term solution and Mid/Long-term strategies

Case Study

Forecast

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01Fight or Flight?

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• Provide legal news alert, information and trends on China's laws and regulations, requirements and inspection of local authorities caused by accidents, etc.

• Online training

• Digital supply chain management

👈 Legal Alert

Online class👈

MID-LONG TERM: ESTABLISH RISK ALERT AND TRAINING SYSTEM

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CONTENTS

Various disruptions to supply chain

Short-term solution and Mid/Long-term strategies

Case study

Forecast

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CONTENTS

Various disruptions to supply chain

Short-term solution and Mid/Long-term strategies

Case study

Forecast

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FORECAST

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B E T H E B E N C H M A R K

[email protected]

Thank you!

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Q&AGlenn BaiManaging Director ChinaMilitzer & Muench International Freight Forwarding

Jing WangBusiness Development Manager, Sustainability ServicesSGS

Supported by:

Chen Liu [Moderator]Vice-President & Nat. representative,SwissCham Shanghai

Managing DirectorWeidmann Electrical Technlogy

Page 40: Webinar on the Impacts of the COVID-19 on …...20/03/2020 6 Connecting worlds. Agenda •Current impact on domestic and international logistics and supply chain •Alternative solutions

Thank you for participating!

Our yearly sponsors:

Tel / 电话: +86 10 8468 3982Email / 邮件: [email protected]

Tel / 电话: +86 21 5368 1236Email / 邮件: [email protected]

SWISSCHAM BEIJING SWISSCHAM SHANGHAI