Supply Chain Disruptions Rise Due to Virus

Containership at Xiamen, China
A containership at the Haitian Container Terminal in Xiamen, China, on Aug. 26. (Qilai Shen/Bloomberg News)

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The coronavirus is having a growing impact on supply chains, according to a new survey by the Institute for Supply Management in a report the Tempe, Ariz.-based nonprofit released March 11.

Nearly 75% of companies are reporting supply chain disruptions due to coronavirus-related transportation restrictions, and more than 80% believe that their organization will experience some impact because of COVID-19 virus disruptions.

The survey says, of those companies, 16% already have reported adjusting their revenue targets down by an average of 5.6%.

“The story the data tells is that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak,” CEO Thomas Derry said in a statement. “For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States — even if they can get orders filled.”

Also in the survey report:

  •  57% said there are longer lead times for tier 1-sourced components from China, with the average lead times more than doubling compared with the end of 2019.
  •  Manufacturers in China report operating at 50% capacity with 56% of normal staff.
  •  44% of respondents do not have a plan in place to address supply disruption from China.
  •  Of the companies expecting supply chain impacts, the severity anticipated increases after the first quarter of 2020.
  •  62% of respondents are experiencing delays in receiving orders from China.
  •  53% are having difficulty getting supply chain information from China.
  •  48% are experiencing delays moving goods within China.
  •  46% report delays loading goods at Chinese ports.

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