Pegasus Industry Update: Potential Coronavirus Impact to Supply Chain

Pegasus Industry Update: Potential Coronavirus Impact to Supply Chain

Insider  |  Company Updates  |  Industry Updates/News

As the coronavirus gains more traction worldwide, with confirmed cases in more than 24 countries, businesses in all industries are experiencing disruption and restrictions within their supply chains. The economic impacts of these restrictions are likely to continue beyond the containment of the health crisis. To help our clients and partners understand the impact on their business, we have put together a few pertinent points of information.

 

Air Freight:

  • Airlines are canceling flights daily and some pilots are refusing to fly into virus zones.
  • With the extended Chinese New Year, demand for airfreight is going to increase significantly. What typically would move ocean freight, may now be forced to move via air.
  • Rates will become volatile and space is going to become more important than price.
  • Suppliers & manufacturers with frequent critical mass are going to take airline priority.
  • Freight is being held already and may be held for weeks to come.
  • As of right now, Shanghai, Hong Kong, and Beijing are remaining open, but should one of those airports close it will be very disruptive.
  • Only certain US airports will receive Asia air cargo disrupting domestic cargo flows.

 

Ocean Freight:

  • Extended factory closings have created a negative demand and vessels are not running at full capacity.
  • Steamship lines are updating their blank sailings list daily, and the list continues to grow.
  • If the situation continues as it is right now, carriers will be forced to reduce capacity, therefore driving rates higher.
  • Once factories begin to reopen, there will be major backlogs at the main ports and increased risks of rolled or unavailable bookings.
  • We encourage our customers to book containers in advance, and plan for delays in their supply chain.

 

Economic Impact:

 

Questions or comments?

 

Pegasus will continue to provide support and insights as this worldwide health crisis continues. Please reach out to your local Pegasus Logistics Sales Representative for more detailed information on how Pegasus can mitigate the risk and impact of the coronavirus on your supply chain.