The supply chain disruption caused by the global spread of the novel coronavirus disease COVID-19 is now expected to have a bigger impact on U.S. imports than originally anticipated.
According to the National Retail Federation (NRF) and Hackett Associates’ latest Global Port Tracker report, the impact of the outbreak will be both longer and larger as factory closures and travel restrictions in China and beyond continue to ripple through the shipping channels.
“There are still a lot of unknowns to fully determine the impact of the coronavirus on the supply chain,” says NRF Vice President for Supply Chain and Customs Policy Jonathan Gold. “As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. Retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption.”
The current forecast, which Hackett Associates Founder Ben Hackett says is “based on the optimistic view that by the end of March or early April some sort of normalcy will have returned to trade,” calls for an 18.3% decrease in March when compared to last year. April, which had not previously been expected to be affected, is now forecast for a 3.5% drop this year.
Provided that Chinese factories return to their full production volume soon, imports are forecast to spike 9.3% in May as companies move to catch up on the lower volumes of product shipped in the first quarter.
Additionally, a separate survey of NRF members found that 40% of respondents reported supply chain disruption due to the virus while another 26% expect to see disruptions in the weeks ahead.
