Economy

Importers face delays in wake of deadly virus

import

Disruptions of the global supply chain resulting from the coronavirus outbreak have finally hit home in Kenya as vendors started reporting delayed orders from their suppliers in China. FILE PHOTO | NMG

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Summary

  • Disruptions of the global supply chain resulting from the coronavirus outbreak have finally hit home in Kenya as vendors started reporting delayed orders from their suppliers in China.
  • Several e-commerce firms have already sent out warnings to shoppers, noting that their orders would be delayed after many Chinese factories suspended their operations as officials tried to contain the deadly disease that has so far been confirmed in 25 countries.
  • Parcel and logistics firm, China Post’s Express Mail Service (EMS), whose service coverage extends to Kenya and 219 other countries across the globe, has warned its customers to expect delayed deliveries owing to delays in transportation and as it strived to meet safety measures.

Disruptions of the global supply chain resulting from the coronavirus outbreak have finally hit home in Kenya as vendors started reporting delayed orders from their suppliers in China.

Several e-commerce firms have already sent out warnings to shoppers, noting that their orders would be delayed after many Chinese factories suspended their operations as officials tried to contain the deadly disease that has so far been confirmed in 25 countries.

Parcel and logistics firm, China Post’s Express Mail Service (EMS), whose service coverage extends to Kenya and 219 other countries across the globe, has warned its customers to expect delayed deliveries owing to delays in transportation and as it strived to meet safety measures.

"To ensure the public’s safety, we will ‘double-disinfect’ the parcels and the vehicles that will go through Wuhan, delaying the shipping progress," the firm said.

In Nairobi, Kilimall, a Chinese marketplace platform, said it would delay orders, although it attributed this to New Year festivities.

"…Due to the Chinese New Year that has been extended up to 09 Feb, global shipping will start from 10-Feb when customs return to work. We humbly request for you to bear with us," said a message sent to a local buyer. China extended the Lunar New Year holiday, which was set to last for six days beginning on January 24, to contain the spread of the deadly virus.

The Chinese government, as a precaution, stopped all businesses across the expansive state from resuming work until next week, February 10. In regions, like Hubei, which remain badly hit by the outbreak, it is uncertain when businesses crucial in the supply chain will reopen.

The outbreak of the deadly Coronavirus in China has resulted in travel restrictions into and within the Asian giant, with the country also ordering the closure of factories in especially in Hubei, the epicenter of the pandemic. The restrictions, made on the grounds of medical need, have exerted an economic toll on China, hitting its industrial production. Its effects are now being felt in Kenya following the closure of key export links like the southern port of Beihai.

Already, the pandemic has had a negative impact on international trade and business as delays in getting back to work continues. Meanwhile, businesses that rely on Chinese factories and individuals that had made orders have no option but to wait, unsure of when their orders will be processed or delivered.

And with growing cases of new infections and reports of two deaths outside China Tuesday, the future remains unpredictable for importers. Reports indicated that 425 people have died from the disease that has also infected over 20,000 people.

Over the last decade, China has grown to become Kenya’s largest trade partner and biggest bilateral lender with imports value hitting Sh324.9 billion in 2019, a 12 percent drop. The value of imports from China, however, dropped for the second year in a row. Leather, rubber, machinery, transport equipment and chemicals remains some of the top imports from China.

The Asian country remains the top source of imported goods for 65 countries according to a 2019 McKinsey Global Institute study.

The effect of the coronavirus is already being felt by some of the world’s biggest companies like Apple, General Electric that rely on the Asian country for materials and parts that are made in Chinese factories.

The World Health Organisation (WHO) said in the 2019 World at Risk report that epidemics and pandemics disrupt trade and tourism while leading to a decline in government revenues and negatively impacting the Gross Domestic Product (GDP) of affected countries. The pandemics, in addition to causing high levels of mortality, are capable of causing panic, destabilising national security, negatively impacting tourism while having a serious impact on the global economy as well as cross-border trade.

In the 2019 report, the UN agency said global epidemics are growing and the world remains unprepared for a fast-moving virulent respiratory pathogen pandemic. Beginning 2011 to 2018, WHO has tracked 1,483 epidemic events such as influenza, severe acute respiratory syndrome (SARS), Middle East Respiratory Syndrome (MERS), Ebola, Zika, plague and yellow fever in 172 countries across the globe.