5 Challenges Re-opening Supply Chains Post-Covid-19

aerial view photography of container van lot

Every small business should be wary of the unique challenges facing them in light of the lockdown finally lifting. There are still travel restrictions, a lot of checks and balances required as well as new trade laws coming into play. There does seem to be good news on the horizon as the vaccines are spreading throughout the world. But, health experts believe that the world will still be tighter than we’d hope, as the restrictions could be in place for at least another 3-6 months. So the export and import markets will be in a unique catch-22. They will need to open quickly, but be careful and prevent any last-minute spreading of the virus. So how do you, a small business owner, get your supply chains back up and running in these new circumstances?

Know the law

Your first port of call isn’t an actual port, it’s your telephone. Pick up your phone and contact your local politician. Whether they are an MP, a senator, a representative or mayor, ask them what the rules are regarding imports into the country and more specifically, the local ports and bays. Every single city, town and state will have their own laws for importing, so you need to differentiate between the various locations. For example, Los Angeles the imports of containers are drying up. However, in the same state, San Francisco is trying to go around various bumps in the road.

This is a clear example of how different mayors and state politicians will have different views on what they should and must not allow into the country. Food in particular is something that is being treated very stringently. Imports from countries like China and many in Europe like Italy are being treated as high-chance cases. Therefore, you should consider how much you can bring in from abroad if this applies to you. Know the law and you can go from there.

The huge political ramifications

The bottom line is, China is not in anybody’s good books now. It doesn’t matter what you think about their actions, supply chains are moving out of the country. Up to 33% of supply chains have already brought their business back home or in another surrounding nation. Why? For one thing, various nations are planning on putting sanctions on the country in question and that means, it’s going to be more expensive to export products from China. If you manufacture your products in the country, you will be paying double the tariffs. Firstly, a tariff to get out of the country, and then another for entering another country. 

So, what can you do to dodge this horrible mess? The only option is to bring your supply chains closer to home. The world shall go through a huge change in the next decade, as more and more small businesses are offering to make products relatively cheaply and still keep the quality high. The skills and talents in the Western world are unmatched; nobody disputes this. So, we recommend that you begin to hire companies to do the work you need, domestically. The transport is less complex and you have more control over standards.

The world economy and exchange rates

The world economy is in the gutter. The largest economies are suffering and that can only mean one thing. It’s going to be better for exports! The currency exchange rate is very favourable for sending money to another business abroad. At least it is, for certain nations that haven’t suffered as badly. Australia for example is actually doing very well. It’s a modern nation, developed economy and hasn’t suffered many issues with the virus. If you have a B2B client in Asia, let’s say in the Philippines, you can send money to the Philippines online to your client very easily. This ‘air wallet’ goes over borders, is accepted in many countries and factors in the exchange rate automatically. The history of your payments is clearly displayed and you have a list of all your ecommerce contacts too. This Is all done in one dashboard, so you can make payments to several customers, scheduled or in real-time.

Exchange rates have been relatively stable in many parts of the world. And the reason is, because of the epic stimulus. Governments are printing money to help businesses around their respective nations. This means that, despite the initial crash, economies are actually managing to keep their currencies relatively balanced. So you should not be put off from buying and selling to customers abroad.

Best ports 

Ports have been the number one issue for many in the import market. It’s not that they can’t load their containers onto ships in the nations they are buying their products from. The issue is, not having a convenient port open to imports of their products. They may need to have their cargo ships be directed to another port, which could mean, the haul by land of the freight, is increased by hundreds of miles. This could account for many extra days between products arriving in ports to arriving at your business premises. 

Here’s a little list of the ports that are still operating to a reasonable capacity.

LA: the port of LA is still open but has taken a severe hit. Altogether the exports are down between 300,000 to 200,000. This has been largely because of the decrease of Chinese imports. However, that means there is more space for your imports to come through now that space has opened up.

TX: Houston Texas has suffered almost the least in the major import states. It has declined just 2.93% of overall imports. This has largely been down to due to eastern-coast cargo ships arriving mainly from South America and Mexico as well as the gulf. Therefore this should be one of your first choices for open ports that will handle a lot of import freight.

BT: Boston is another great port. It has decreased by just 1.83% making it the most attractive port for imports on the Eastern coast. It’s in a very good location, right next to Canada and one of the first ports for cargo ships coming from Europe. 

Risk in marketing

Some customers might not want to use products which have been imported due to the higher risk of contamination. The reason for this is because some countries have far less stringent laws regarding decontamination and that means, products are not properly checked before they land in port. You might have to get your products sprayed or wiped before they can be sold. However, if you do this or allow the port authorities to do this, you can have your product certified as safe. Putting a covid-19 safe sticker on your product packaging could help. 

Letting your online ecommerce customers know that you have followed proper precautions to make sure your imported products are safe, could also help boost confidence. A short video ad of your products being safely imported, decontaminated and given certification by a health organization could be very useful on social media platforms. 

There are multiple challenges ahead in this new but exciting post-covid world. Imports will be the most uphill battle but that can be cured by bringing your supply chains back home again. It might cost a little more but you will have much more control over your products being manufactured. Try to find out which ports are the best options if you are going to continue importing as you did before. You can save a lot of time and headache by choosing a more convenient port.

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