Coronavirus will test supply chain partnerships

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The coronavirus (COVID-19) pandemic is not only a health crisis impacting daily life for individuals but has led to cascading supply chain disruptions, especially in Asia. Shippers and transportation providers are pressured to anticipate the impacts of the outbreak in North America with vital data changing every day. While the possible long-term impacts of the virus on supply chains are unclear, companies have to make decisions today on how to adjust to this disruption.

For now at least, Arrive Logistics’ executive vice president, Eric Lien, is counseling his customers to focus on preparation, flexibility and over-communication with trusted partners on their long-term strategy. Arrive Logistics is a third-party logistics provider headquartered in Austin, Texas, with offices in Chicago and Chattanooga, Tennessee.

The shutdown of manufacturing plants and logistics services in China coincided with a lengthy national holiday — the Lunar New Year — that Lien’s customers say was the best possible time for quarantines and work stoppages to occur.

“I was with 11 customers in LA last week; half a dozen of them were Asian-owned,” Lien said. “They were of the opinion that if there was a good time for it to happen, it was now. The bigger question is ‘does the customer have upstream suppliers that are replenishing downstream manufacturers they’re dependent on? Are those upstream manufacturers still hurt by labor shortages because of coronavirus?’ There are still many unknowns.”