Potential impact of coronavirus on international supply chains
13 February 2020
Coronavirus poses a short-term threat to exports to China, having already impacted global supply chains and the Chinese economy.
In an attempt to control the outbreak, the Chinese Government extended the Lunar New Year holiday. This had a knock on effect on freight, with vessel sailings cancelled and reduced flights to from China, especially in areas such as Wuhan and Ningbo.
Freight rates are expected to increase as a result. However, according to Maersk, 10 February was marked as the return-to-work date for most provinces, with vessel sailings returning to normal. Imports are therefore starting to return to a normal level.
Impact on food and drink exports and imports
In recent years, food exports have been soaring from the UK to China, with DEFRA quoting the top five export products as whisky, salmon, chocolate, cheese and beer. Given the anticipated impact of Coronavirus on the Chinese economy, it is likely there will be a reduction in demand of these luxury products.
In terms of imports from China, the risk to food and drink supply remains low, with no cases outside of China expected to have been derived from such a source. No additional measures have been introduced toward imported goods from China. UK Port Health Authorities are concentrating their checks on the health of persons onboard inbound vessels in an effort to prevent the disease spreading, with the option to detain a ship if there is an imminent risk to health.
The importance of a clear overseas strategy
We take this opportunity to stress the importance of a clear overseas sales strategy, without over-reliance on one specific market, and for importers to also have procurement contingencies in place. SARS dented the global economy twenty years ago. Coronavirus is expected to have a more significant impact, with China holding a more prominent position in terms of global trade in 2020.
The latest news on Coronavirus
Is there another possible transmission route?
There are currently no cases which have shown any evidence of humans being infected with the new type of Coronavirus by another route, such as via the consumption of contaminated food or via imported toys. There are also no known reports for other Coronaviruses about infections due to food or contact with dry surfaces. Transmission via surfaces that have recently been contaminated with viruses is, nonetheless, possible through smear infections. However, this is only likely to occur during a short period after contamination, due to the relatively low stability of Coronaviruses in the environment.
Can imported goods from regions where the disease has spread be sources of an infection in humans?
Due to the transmission methods recorded thus far, and the relatively low environmental stability of Coronaviruses, it is unlikely that imported goods such as imported foods or consumer goods and toys, tools, computers, clothes or shoes may be sources of an infection with the new type of Coronavirus, according to the current state of knowledge.