Panic Buying is Taking Hold of Essential Items
Around the world, it has been widely reported that panic buying is emptying shelves. Due to the impact of the Coronavirus and potential quarantine periods, consumers have begun to stockpile essential items for their household. The self-isolation period for people who may have been exposed to the COVID-19 virus is currently recommended to be fourteen days at home with no external contact, including trips to the local supermarkets. Lockdown has already begun in some countries including Spain and Italy, and panic buying of essential supplies has been noted to be escalating.
Considered by many as an overreaction to the current Coronavirus epidemic, panic buying has led to mass shortages of essential products on shelves, hoarding of essential supplies such as medicines and toilet paper has been widely reported in the news. Business processes are being tested by this unforeseen demand and it is impacting the whole supply chain for some organizations.
How does panic buying impact the supply chain?
Some retailers are already struggling with regular sourcing of supplies from manufacturers, notably China, due to the factory shutdowns that occurred over the extended lunar new year holidays, even though factories are reportedly now back to normal levels. The time-lapse for the transportation of goods from China has hit retailers now as stocks have not yet been replenished to full inventory. It may take some weeks before products are back to normal levels. Logistics management will be a key focus area and leveling out the ‘bullwhip’ effect of high consumer demand will take time.
The increase in demand for essential items, due to panic buying, is putting further pressure on inventory levels. Efficient supply chains won’t leave shelves empty for extended periods, but the strain on supply chains is evident as non-forecasted levels of demand continue to rise and shortages are becoming apparent to the end consumer.
How long will panic buying last?
That is the question that many supply chain managers are contemplating. It is unknown how long the Coronavirus will continue to spread, and every day different countries are reporting scenarios that remain uncertain for the time being with differing approaches to contain the virus. However, in the majority of cases, smart supply chains can cope with fluctuating supply and demand. With intelligent supply chain visibility tools, gaps in inventory can easily be identified. The question, however, is how quickly can shortages be fulfilled and will transportation be available to get products in the right place at the right time for the right price? As quarantine periods continue, will other parts of the world have issues such as truck driver shortage or limited air freight capacity as we have previously seen in China?
Supply chain resilience will continue to be tested over the forthcoming weeks during this period of uncertainty.
At this time Crane Worldwide Logistics continues to work in partnership with our clients offering air freight, ocean freight, and rail freight services (China – Europe) to minimize additional costs in the supply chain. We recognize that space is a priority and charters are also available to ensure additional capacity is available for our clients when they need it the most, reach out if we can help!