Shipper insight: Coronavirus shutdowns create new supply chain pressures

3/29/2020

Self-isolation, social distancing policies and panic-buying are creating supply chain pressures beyond the dash to empty supermarket shelves in the UK and beyond.

Weeks of crazed shopping at supermarkets across the UK has seen an extra £1 billion of food stockpiled at people's homes in recent weeks, creating unnecessary shortages for the elderly and frontline NHS workers who need supplies most.

Echoing the words of the UK government, Peter Ward, CEO of the UK Warehousing Association (UKWA), told Lloyd’s Loading List that shortages have been entirely induced by buyers. 

“The feedback we are getting is that problems are not on the supply side,” he said. “All issues are being created because of the reactions of consumers who are panic buying.”

Stephen Powis, national medical director at NHS England, warned people to stop hoarding.

However, beyond the stripping of shelves of anything and everything edible, the prospect of weeks and possibly months stuck indoors is prompting UK citizens to stock up on entertainment.

Orders for games and toys have been surging. And, with gyms now closed in the UK and across much of Europe, those keen to keep active are splashing out.

“I’ve been here seven years and I’ve never, ever seen it like it has been the last few days,” Darren Street, logistics manager at Best Gym Equipment, told Lloyd’s Loading List.

“Now is normally the seasonal lull after Christmas. It should be really quiet. We could never have predicted the increase in volume.

“For perspective, on a busy day in Black Friday week we’d probably get 30 orders or so. At the moment we’re getting over a hundred per day. 

“We’ve never seen anything like it. We’re working 9am to 10 pm each day.”

The branded health and gym equipment sold by Best Gym Equipment and other suppliers is mostly manufactured in China. The surge in orders in the last two weeks has come at a time when manufacturers are still waiting for fresh inventory following the Lunar New Year/Covid-19 shutdown of factories in China.

“A lot of our suppliers are starting to run out of stock,” said Street. “Our suppliers say there isn’t a problem now with new equipment being shipped from China, but a lot is still on the water in transit.”

The flipside of the surge in orders for those staying at home, however, is the total drop-off in orders from gyms, many of which face an uncertain future.

“Usually 50% of our business is commercial orders for gyms and that’s, understandably, all stopped,” said Street. “People are buying the kit to train at home.”