The Supply Chain Matters blog provides a weekly summary capsule of news reports that have implications for various industry supply chains.
With COVID-19 coronavirus news once again on the rise, we provide this feature to assist our readers in their efforts to keep updated on noteworthy developments. For reference, our previous capsule update was published on September 11.
Companies, institutions and product categories included in this update include:
JOHNS Hopkins- Global Coronavirus Infections
U.S. Food and Grocery Inventory Stockpiling
Exploding Bicycle Sales
Shortage of Appliances, Refrigerators and Freezers
China’s Export Sales on the Rise
Global Deaths Attributed to COVID-19 Coronavirus Surpass One Million
This week provided what could only be described as a grim milestone.
According to the Johns Hopkins Coronavirus Resource Center, the global death toll attributed to this virus now surpasses one million victims. The top five countries with reported deaths include:
- United States
- United Kingdom
As of this week, since the first data was recorded by Johns Hopkins earlier this year, over 34 million positive cases have been recorded and the actual rate of infection is likely higher. As the Northern Hemisphere nations begin their transition from the summer to the fall and winter months when more people reside indoors,, there are increased concerns for added outbreaks in the coming months. Thus far, efforts to test various vaccines that can immunize people from the virus are ongoing, but widespread distribution and administration is not likely until sometime in 2021.
Here in the United States, we woke up this morning with the sudden news that both U.S. President Donald Trump, and First Lady Melania Trump have each tested positive for the virus and are now quarantining. It remains unclear as to how many other people who might have interacted with the President may have been exposed.
Amazon Reveals Upwards of 20,000 Workers Tested Positive for Coronavirus
Online retailer Amazon now indicates that almost 20,000 U.S. employees have tested positive for COVID-19 during a time period of a little over six months.
The online retailer indicated in a blog post this week that 19,816 workers had tested positive for the respiratory disease, or were presumed positive, out of 1,372,000 U.S. front-line employees who worked for the company from March 1 to Sept. 19, an infection rate of 1.44 percent. This revelation came amid a lot of controversary from the U.S. political establishment and media questioning why the online retailer had previously failed to provide and data relative to worker infection levels.
In its reporting, Bloomberg noted that the over one million front-line employees exceeds all of Amazon’s current employees, and attributed this as during the stated period, high employee turnover likely caused the total stated employee number to be higher.
In an effort to perhaps smooth over reactions, the blog post points out that if its employees contracted the virus at a rate equal to that of the general population, Amazon would have seen upwards of 34,000 infections. That attempt seen hollow from the notion that not all of the general population has been deemed as essential workers, which Amazon’s front-line workers have.
Amazon indicated in its blog post that it was ramping up an in-house coronavirus testing program launched earlier this year and hoped to conduct 50,000 tests a day by October.
While on the subject of Amazon workers, the online retailer recently announced plans to hire an additional 100,000 workers in the United States and Canada. Reportedly these employees are not considered to be seasonal but rather augmenting various Amazon customer fulfillment and operational facilities. According to the retailer, nearly 100 new operational centers are about to open across the U.S. while 75 others will be across Canada.
U.S. Food and Grocery Outlets Reportedly Stockpiling Inventory
The Wall Street Journal reported that U.S. grocery stores and food outlets are preparing for another surge in sales volumes amid a new rise in COVID-19 cases and the impending holiday period.
The report indicates that food companies are accelerating production of what they consider as most popular items including Thanksgiving and Christmas holiday items in an effort to not be caught unprepared in the face of a virus surge in the coming months. Rather than traditional inventory replenishment planning, food sellers are apparently stocking “months” rather than “weeks” worth of food staples in preparation for what is believed to be a winter when people will be restricted mostly to their residences. Noted is that many major food brands have yet to be able to rebuild to normal nationwide inventories, while food retailers such as Walmart are overriding inventory replenishment algorithms among multiple stores to build up extra safety stock inventory for products deemed to be in high demand.
Further cited is grocery chain Associated Food Stores which has started building termed “pandemic pallets” consisting of cleaning and sanitizing products to be positioned in all of the chain’s warehouses.
Exploding Sales of Bikes Across the United States and Elsewhere
The Colorado Sun reports with the pandemic closing gyms and fitness centers, the demand for bicycles is at an unprecedented high in Colorado and across the United States.
The report cites data from NPD Group indicating that between April and July of this year, U.S. bike sales were up 81 percent. Among select bicycle manufacturers or distributors, other cited data indicates that Giant sold 48 percent more bikes directly to consumers in August, Trek expects to more than double its sales this year, while Specialized has sold 213 percent more bikes in August than a year ago. Some consumers have turned to pre-owned bikes while bicycle parts and accessories have reportedly been impossible to purchase.
Apparently, lack of bicycle inventory has become a worldwide shortage problem, initially as a result of initial manufacturing supply disruption across China, and now with exploding demand far beyond historic sales levels.
So much for traditional sales forecasting.
Shortage of Appliances, Refrigerators and Freezers
National Public Radio reports that if U.S. consumers have intentions to purchase a new or replacement refrigerator or freezer they will likely have to be very patient.
According to the latest available data from the Association of Home Appliance Manufacturers, inventory and shipment levels for the first half of this year are down 7 percent year-to-date as of June. Noted retailers indicated that they have not observed such market demand in quite a long time, with one retailer providing a 25-year perspective.
Consumers have be forced to settle for whatever models or inventory that are currently in inventory, given the amount of backlogged inventory orders across the industry. One appliance retailer near Boston told reporters that the retailer sold more freezers in two days than all of last year freezer sales.
Consumers are obviously in food storage mode.
Our Supply Chain Matters readers may well be able to add more perspective to this situation in that in the early days of pandemic shutdowns across China and other parts of Asia, container shipping lines were cancelling large numbers of scheduled sailings. Now, As Asian based appliance manufacturers continue to address prior component supply shortages, those many backlogged appliances are likely on the current fleets of container vessels that have now made their way to the U.S. or about to in the coming weeks.
China’s Export Volumes on the Rise
Reuters reports that China’s exports have risen for the third consecutive month in August, eclipsing an extended fall in imports, as more of its trading partners relaxed coronavirus lockdowns. The data is being viewed as a further sign of recovery in the world’s second-biggest economy.
According to government custom’s data, the country’s exports in August rose a solid 9.5% from a year earlier, marking the strongest gain since March 2019. The figure exceeded analysts’ expectations for 7.1 percent growth and compared with a 7.2 percent increase in July.
China’s trade surplus with the United States widened to $34.24 billion in August from $32.46 billion in July.
The report indicates that strong exports suggest a faster and more balanced recovery for the Chinese economy, which is rebounding from a record first-quarter slump thanks largely to domestic stimulus measures.
As we pen this update, the Caixin China General Manufacturing PMI for September, viewed as more an indicator of privately owned manufacturers reported an overall value of 53, and further pointed to export business expanding at the quickest pace since August of 2017.
This concludes our October 2, 2020 COVID-19 Industry Supply Chain News Capsule.
As the news cycle warrants we will continue such updates initially on a bi-weekly cycle.
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