2021 Chinese New Year and COVID-19 Impact on Supply Chains
The 2021 Chinese New Year begins today, Friday, February 12th. Your operations will likely feel the impact of the Chinese New Year directly, particularly this year, as we are seeing substantial impacts from COVID-19.
Due to the current wave of the Coronavirus in the US and the initial recovery to the global economy that has increased the demand for materials, there is a likelihood that delivery dates for your orders may be impacted.
ROTHKOPF is diligently watching expected inbound shipments to identify any critical delays earlier so that we may try to lessen the impact. We hope this information will assist you in the upcoming months.
Impact on Ocean and Air Freight:
Due to lower supply and increasing demand for space, shipping costs have escalated to the point of breaking records. Ocean container rates are at an all-time high, and air freight isn’t much better.
Shipping lanes will experience significant delays, and customs will take longer to process deliveries, which in turn has created a shortage of containers.
Demand is growing overall across product lines due to the stabilizing of the general economy. However, factories are at full capacity in most cases and do not have the raw material or personnel in place to increase production quickly due to Covid.
Due to the pandemic and strongly increasing demand, lead times are extending and prices are increasing. In most cases, production is currently projected at 13 weeks.
Other Important Notes:
Leading manufacturers are reporting that lead-time for new production is out to mid-June, due to the scheduling of future sea shipments and the container shortage.
Some factories are no longer offering to produce any o-rings smaller than 5.00 x .080 (millimeters), which translates to .196 x .031 (inches), since production lines are at full capacity and in order to improve lead-times, they are being selective in the sizes they produce. They do plan to produce the smaller sizes again in the future, but there is no timeline on when this restriction will be lifted.
We will continue to work with distributors and manufacturers to best minimize the impact of these developments. However, future orders could result in extended deliveries based on this latest information. Please do not hesitate to speak with your contact here at ROTHKOPF. We will continue to update you as new information is received.