- February is typically a light month for shipping out of China.
- If other transporation industries follow the airlines, delivery could be disrupted.
- Any slowdown would surface in spring at the earliest but could impact back-to-school.
Shoppers aren’t likely to immediately see gaps on store racks in the wake of the coronavirus outbreak in China. That could change if efforts to contain the virus put a crimp in the making and delivery of goods.
“As of right now, we have not heard of any impact from our members,” said Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, an industry trade group.
“I think retailers are all taking an assessment … to figure out what their exposure is, what’s the potential impact and looking at putting contingency plans to put in place if need be,” he said.
Coronavirus has sickened more than 6,000 people and killed at least 133 in China, leading McDonald’s and Starbucks to close hundreds of Chinese locations, airlines to cancel flights and companies to take safety precautions to keep their employees safe.
FedEx said it follows directions from Chinese officials on containing the virus, which “may affect shipments inbound and outbound to/from Wuhan as well as shipments moving within Wuhan.” The delivery company has roughly 9,500 employees in China and 220 flights a week out of five Chinese airports.
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Wednesday, American Airlines said it will suspend some flights between China and the USA for nearly seven weeks. United said it would halt 24 flights between the two countries during the first week of February. And British Airways, as well as the Asian budget carriers Lion Air and Seoul Air, ceased all flights to China.
Coronavirus at slow delivery time
The outbreak comes as China celebrates the Lunar New Year, a period when factories are typically shuttered, minimizing the potential impact on retailers and shoppers.
“February is usually the lightest month for shipping” because of the holiday, Gold said. “We’re hearing some discussion of factories being closed longer than they normally would. Obviously, that could have an impact if factories aren’t opened up in a timely manner.”
Most goods are shipped to retailers rather than ferried by air, which is significantly more expensive. If other transportation industries follow the lead of the airlines that pared or stopped flights, that could disrupt delivery schedules.
Many retailers would typically have brought in a large number of goods before Chinese factories closed for the holiday in January. Any slowdown in the delivery of goods would probably not be noticeable until late spring at the earliest, and retailers, who have plans to deal with emergencies ranging from earthquakes to trade wars, might consider getting goods from other locations if necessary.
Anne Harper, founder and CEO of the New York-based OMG Accessories, said children’s backpacks, lunch bags and other items she has made in China face a production setback because Chinese authorities extended the new year break.
“We definitely know that this is going to cause a significant disruption in production,” she said. “It’s really unknown as to when everyone will be back to full capacity.”
The back-to-school period could be particularly difficult for some retailers, she said. Harper typically would start having merchandise for the fall shipped from the Chinese factory she partners with in April.
Luckily, she had her supplies shipped three months ahead of schedule. They’ve already arrived.
“There always seems to be something,” Harper said. “First it’s tariffs. One year, it was port strikes. Between all these different unforeseen situations, I’ve just learned to really plan ahead.”
Contributing: Max Garland, Memphis Commercial Appeal
Follow Charisse Jones on Twitter @charissejones