Seven out of the ten busiest ports in the world are located in China. As 80% of global trade occurs through the sea as per the United Nations Conference on Trade and Development, Chinese ports handle the bulk of the global trade. The initial lockdowns imposed due to the coronavirus pandemic impacted global shipping due to a shortfall of labor in warehouses, ports, and in the transport chain. Container lines reduced calls on Chinese ports and resulted in delayed shipment deliveries even after the pandemic was brought under control.
The pandemic resulted in factory shutdowns, shortage of labor, longer shipping times, and closure of ports across the world. Close to three-fourths of companies in the U.S. are said to have experienced supply chain disruption to some extent.
With countries shutting down ports and requiring people to stay at home, most Amazon sellers were presented with the uphill task of meeting the product-supply demand. While production suffered to a significant extent, businesses also found it increasingly difficult to ship products to consumers.
According to a Baker McKenzie poll, 93% of companies in China were considering making changes to supply chains in the current situation. Out of these, 18% consider the total transformation of the supply chain, while 58% are looking at making major changes.
While there is a rise in demand for specific skills in the supply chain industry, the last couple of years have also heralded the growing use of automation in China’s supply chain, such as robots in warehouses that improve efficiency and security. As more and more Chinese supply chain companies recognize the benefits of artificial intelligence and the interconnection brought by the Internet of Things, they are increasingly focusing on digitizing the supply chain. A recent Deloitte report states that Chinese supply chains have changed from linear operations to open and interconnected supply operations.
However, analysts and economic experts are optimistic about China bouncing back from the pandemic-related disruptions to supply chains. A poll in which 40 economists participated, indicates that these experts believed the Chinese economy would pick up when the pandemic is contained. This will result in a positive impact on the supply chains across the globe as well.
For unprepared Amazon sellers, the disrupted supply chains in China and across the world can negatively impact sales. However, by working with China sourcing agents, you can realign your business strategy, find the right supplier, determine the suitable shipping mode, and get back on track with your sales.