Supply Chain Weekly Wrap-Up: 01/24/20 – 01/30/20

Coronavirus outbreak to cause Supply Chain disruption

Global supply chains are bracing themselves for widespread disruption after the outbreak of the Coronavirus in China. The outbreak has seen the Chinese Government extend the Chinese New Year holiday through to February 2nd and in the most affected regions until February 9th to try and reduce the spread of the virus. While many supply chains had prepared for the Chinese New Year holiday, the extended holiday period and consequential factory closures will cause disruptions for many global supply chains.

Other efforts to slow the outbreak of the disease will also affect the logistics of getting premade goods and product parts out of China, for example many airlines including United Airlines and British Airways have cancelled flights to and from the country. It is also expected to cause shipping delays with ocean carriers warning that while ports are currently still operational, prolonged delays should be expected.

With the cities most affected by the virus, for example Wuhan, currently being on lockdown and many global supply chains having facilities in these cities, the effects of the Coronavirus outbreak on global supply chains will be seen over the coming weeks.

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UPS to increase weekend deliveries

As online retail sales surge 127% to almost $591 billion in the U.S. in 2019, according to research firm eMarketer, UPS has announced that it aims to more than double its weekend deliveries in 2020. The move comes in a bid to meet and satisfy the demands of e-commerce customers.

In order to achieve the increase in deliveries, the company said that it would like to expand its Saturday delivery service to 40 million more U.S. customers. Alongside this, the company introduced a Sunday delivery service at the beginning of the year following in the footsteps of rivals FedEx, who implemented this late last year. However, with weekend deliveries often being more expensive, UPS will “need to add more packages per delivery to boost profit on residential shipments” according to Dean Maciuba, a director at Logistics Trends & Insights.

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Container line group sets track and trace standards

The Digital Container Shipping Association (DCSA), a non-profit group, which is made up of nine major ocean freight carriers including eight of the top 10 container lines, has published track and trace standards in an effort to unify information alongside furthering digitalization goals. The group, which membership represents 70% of the global container market, said that carriers, shippers and third parties will be able to use the track and trace standards to “enable cross-carrier shipment tracking”.

The purpose of the DCSA was to create digital standards and “quickly overcome the pain points in the industry” including the fact that ocean carriers have often been notoriously slow to digitalize and have often struggled to collaborate with one another. However, the introduction of the track and trace standards sees the DCSA meet its goal of creating digital standards and according to the group “set[s] new standards for collaboration” within the industry.

According to the DCSA the work doesn’t stop with the track and trace standards, with the group noting that this was just one of many initiatives that will be used “to transform inefficient practices and accelerate digitalization”.

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Have a great weekend!