Western supply chains buckle as coronavirus lockdowns spread


Jonathan Saul, Sonya Dowsett & Lisa Baertlein, Reuters 

Mar 23, 2020


LONDON/MADRID/LOS ANGELES (Reuters) - Freight carriers are struggling to deliver goods by land, sea or air as the coronavirus pandemic forces Western governments to impose lockdowns, threatening supplies of vital products including medicines into the most affected areas, such as Italy.


While China’s draconian steps to stop the spread of the virus are now allowing its economy slowly to come back online, supply chains are backing up in other parts of the world.


Problems ranging from finding enough truck drivers to restrictions on seafarers and a lack of air freight are hitting the smooth flow of goods, freight logistics operators say.


Stockpiling and panic buying by consumers are also adding to strains.


“Supply chain disruption has moved rapidly from east to west,” said Mohammed Esa, chief commercial officer, Europe, with global logistics group Agility.


Companies involved in the transport of goods say the impact is being felt hardest in air freight as more airlines shut down services, adding to difficulties with the transport of key goods such as medicines and perishable foods.


“What you could normally move in two or three days is going to take twice as long - you have to still get it through the airport, you have put it on a truck and get it through borders,” Esa said.


One European supplier of active pharmaceutical ingredients used by the industry, who declined to be named, said the business was struggling to get supplies transported by plane.


The U.S. decision to ban foreign visitors has also cut an estimated 85% of U.S. air freight capacity, as vast amounts of goods were transported in the bellies of passenger planes that are now grounded. That has pushing freight costs up five-fold as space for remaining cargo runs is limited, companies directly involved in the trade say.


Goods from Europe are being re-routed through places including Mexico and Canada to the United States, companies say, but that adds time and also comes at a price...