Coronavirus (Covid-19) impacts on import/export business

Easing import customs and tariffs for essential manufacture products

According to the latest reports by WTO in the context of Coronavirus COVID-19 most countries have taken drastic measures in order to facilitate sourcing and importing essential products. As an example Anguilla disposte  tariffs on protective ingredients and medical goods. Meanwhile Argentina eliminated medical equipment and personal protective equipment from the list requiring non-automatic report import licensing requirements. 

It also included suspension of certain customs processing deadlines, and renouncement of export duties by the sworn export declaration MSME.

Australia, Azerbaijan, Bangladesh, Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, El Salvador, Eurasian Economic Union, Fiji, Georgia  also waived tariffs for certain goods like test kits, gloves, gowns, disinfectant preparations.

Restrictions and ban on exporting medical equipment

On the other hand a general restriction has been brought into place for exporting certain medical equipment by several countries. Argentina, Costa Rica and Brazil implement export licensing on medical devices. In the same way Albania, Algeria interdict exporting certain drugs and medical equipment.  Australia also limited export of products which are necessary in fighting against Coronavirus (COVID- 19).

A series of ban on exporting certain medical essentials by the following countries: Azerbaijan on preparations and supplies necessary for combating the virus, Kingdom of Bahrain on face masks, Bangladesh on medical and non-medical masks and disinfectants, Bulgaria on quine based-medicaments, Colombia on personal protective equipment .

As well as Cyprus and Czech Republic on medicinal products related to COVID-19, Ecuador on pharmaceutical ingredients and protective equipment.  Egypt on leguminous vegetables and thereof, El Salvador and Honduras on dried leguminous vegetable, Georgia on diagnostic certain laboratory equipment  and Hungary, Greece Denmark, France, Estonia.

Large economies

The big economies like China, European Union, Eurasian Economic Union and India also brought new amendments to their export policies.

Impact of disruption in supply chain on freight forwarders

Shipping and logistic services are facing challenges with closed shipping ports and new changes in port protocols requiring additional documentation and examination for medical and essential goods. In addition, measures have been taken to ensure health and safety of people working in the supply chain. Supplying through air freights has been disrupted due to cancellation of hundred and thousand flights. 

Meanwhile freight forwarders are facing closed borders especially for non-essential manufacture products. Except for some freight forwarders like Docshipper that has good networks and partnership with suppliers and manufacturers. Even in such pandemic situations we work hard and we try to find ways to give you a hand. 

The key solutions to overcome challenges caused by Coronavirus (COVID-19)

The real solution to come out successfully from this crise for business owners is in having cooperation and transparent information related to business policies among governments. On the other hand International supply chains should be kept flown, especially for essential manufactured products and avoiding making the situation worse. We can’t survive from this pandemic by closing borders and lockdown. 

SMEs struggling new challenges 

The pandemic has affected negatively on almost all business owners such as wholesales, logistics services and freight forwarders and manufacturers, but the impact on small business owners is large, especially for those who import from China. Manufacturers have closed their factories and small businesses running out of inventories.

Most small and medium size enterprises stock up only for two to three months due to a small capital or a storage shortage. In the current situations they can’t order for more supplies and with the delays in supply from China they lose their ranking in the market and it could be catastrophic for some. 

Except for those who have several supply chain streams and they are not concentrated only on China.

Coronavirus (COVID-19) impacts on China and the world economy

China now has a very significant role in the world especially from an economic point of view. It is the second largest-economy in the world being the United States in the first place. China accounts for 9.1% of imports of the world and 13.7% of exports, as some call China as the factory of the world.

Most of wholesalers are situated in China, now you can guess the effects of closure of manufacturers in China and the disruption of supply chain.

But you should not worry because there are freight forwarders like Docshipper which even in such tuff situations can help you in sourcing and shipment of your goods from china using several streams such as air freight, ship freight and train freight according to your needs.

Coronavirus (COVID-19) impacts on China vs U.S. trade relations

Due to what Donald Trump claims unfair trade practices by China, it’s been two years that the United States and China are in a continues trade war. It begun by the United States by raising import tariffs from 3% to above 20% on 360 billion worth of Chinese products. As revenge China in his turn raised import tariffs on around hundred billion worth U.S. import products from 6% to 20%. After long negotiation on Dec 13, 2019 the two country came to a deal which they called it Phase one and the tension started decreasing.

But after emerging Coronavirus which is also called Covid-19 in China and spreading very fast in the U.S. and around the world the two counties started blaming each other for not being honest and responsible regarding the fact that how dangerous the virus is and how it can spread very fast.

But things might get better with Joe Biden the elect president of the United States. Joe Biden who is a republican could win the presidential election of the United States on November 2020. Meanwhile after passing one week from the election it is still hard for Trump to accept his defeat in the election by his opponent Joe Biden. But he should leave the White House on 13 January 2020.

Economists and politicians expect the United States would have different and better foreign affairs leaded by the new president Joe Biden.

Coronavirus(covid-19) impacts on China vs EU trade relations

After intense measures taken by China and EU to prevent the spread of the COVID-19 the EU’s seasonal trade shrank from  €46.5 billion in January  2020 to € 43.1 billion in February of the same year. It shrank more to reach €41.9 billion in March.

Fortunately it bounced back above its January 2020 level to € 49.0 billion in April. Thanks to large imports of textiles, surgical masks, face masks, single use sheets, automatic data processing machines, electronic tubes, valves and related articles from China to the EU.

On the other hand the large imports decrease were concentrated  more on  footwear, telecommunications equipment, and baby carriages, toys, games and sporting goods. They made up 55% of total trade in goods in the year 2019. But there is some good news around creation of Coronavirus (COVID-19) positive vaccine. 

Coronavirus (Covid-19) vaccine

Coronavirus put the entire world in a shock and for the first time the entire world has the same as president Macron calls it invisible enemy.  Global vaccine makers around the world are trying hard to find a vaccine for this virus and save the world. There are several vaccine candidates in the trial phase and might come to the public soon. Some countries has rushed and claimed finding a positive vaccine even before it’s final clinical trials.

Russian claims a successful Coronavirus (Covid-19) vaccine

The first country was Russia who on August 11/2020 announced finding a vaccine for this deadliest virus when it was only in phase 2/3 trail. They named it as Sputnik V. They didn’t published enough details about the vaccine to world and it hasn’t tested to a big number of people, only 76 people including Putin’s the President of Russia daughter. Specialists doubt on effectiveness of this vaccine.

Chinese Coronavirus (Covide-19) positive vaccine

After Russia, China subsequently announced creating a successful Coronavirus (Covid-19) vaccine. China is developing four Coronavirus (Covide-19) vaccine candidates and they are in the final stage of trial. Chinese pharmaceutical companies like Sinovac and has tested it’s vaccine to the thousands of participants.

Pfizer and BioNTech also announced an effective vaccine

Pfizer an American pharmaceutical company and BioNTech a German pharmaceutical company working jointly recently announced their 90% effective Coronavirus (Covid-19) vaccine phase 3 trials successfully. The vaccine has been studied on 43,538 participants which is a big number and from different backgrounds. This vaccine is more promising than the ones announced previously.

Post-COVID-19 sourcing and global supply chain

Coronavirus (COVID-19) pandemic highlighted what are the risks of having only one supplier in this case it was China. After closing manufacturers in China all supply chains disrupted. All the businesses sourcing from China went out of inventories. This was true especially about medical and protective equipment which are mainly sourced and supplied from China, in addition to the high-tech products and equipment.

Can you guess why Apple couldn’t make the IPhone 12 smartphone and couldn’t release it in time? Well, the answer is obvious because Apples’ supply chain disrupted and also it was because of the factories closure in China. Not Apple neither anybody else had the risk of a pandemic in their sourcing and supply chain risks list.

The same story was true for hundreds and thousands other companies which their only sourcing stream was in China. But we will see some major changes in sourcing and supplying hubs in the future.

Where will locate the future manufacturing hubs?

One big lesson that Coronavirus pandemic taught us is to diversify our manufacturing and the supplying hubs. And the risks of relying only on one supplier would be so high. There will be a big shift in manufacturing and supplying hubs. And the future locations that would benefit from these diversifications are: India (with almost the same capacities and sources as China), Mexico, and Vietnam.

Automation and digitization of firms

Besides the shift in sourcing and suppling streams, the second shift would be in the way we will work in the future. Most of businesses will go online and towards automation. Companies like Microsoft, Facebook and Twitter are already went almost 100% online. Digitization would take time but it would be very effective and efficient in every situation.

Advantages of digitization to the Firms & employees

More and more firms are increasingly moving towards digitization. This trend would benefit the companies and also the employees. For companies some fixed costs like renting offices places, insurance for the office equipment and building and … would cut.

On the other hand the benefit for the employees would be at least regarding the time they save which normally they were spending in the transport for going to office and coming back home, the costs they normally bear in buying formal clothes for office. Not to mention the decrease in the air pollution, thanks to the decrease in using private and public transports.