Mar 24, 2020 - Economy

Freight disruptions significantly delay vital coronavirus supplies

A shipment arriving in Liege Airport in Belgium

A new shipment of facemasks arriving in Liege, Belgium, on March 23. Photo: Vincent Kalut / Photonews via Getty Images

The backup in global supply chains plus a manufacturing and transportation sector already weakened by the U.S.-China trade war are combining to slow the rate of goods deliveries to nearly double their normal times.

What's happening: "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," Reuters reports.

  • "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."

The big picture: Air cargo shipments had been declining since early 2019, and 75% of U.S. companies surveyed by the Institute for Supply Management said two weeks ago their supply chains already had been upended, with most expecting disruptions to continue.

  • The coronavirus outbreak that moved from China at the beginning of the year to Europe and then the Americas has meant significant delays transporting key goods such as medicines and perishable foods.

What they're saying: "Supply chain disruption has moved rapidly from east to west," Mohammed Esa, chief commercial officer for Europe with global logistics group Agility, told Reuters.

  • "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."

What's next: Boeing announced a full work stoppage in Seattle and GE laid off employees making jet engines, per the Wall Street Journal, while major U.S. airlines are discussing putting a stop to all passenger flights.

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