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How has COVID-19 Affected the UK Housing Market?

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Archives, Global Trade Daily, Special Reports

How has COVID-19 Affected the UK Housing Market?

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Just about every sector of the economy was touched by the effects of the pandemic in some way or another. Online retailers enjoyed surging sales as bored brits looked for new toys with which to distract themselves. High streets, on the other hand, remained deserted.

The housing market felt the impact of the lockdown measures in profound and distinctive ways, and it’s difficult to say with certainty what the long-term effects will be.

During the lockdown

The housing market was effectively put into suspended animation. After all, if you’re not allowed to leave your house, it follows that you won’t be able to inspect any other houses which you might like to buy. Growth in house prices slumped to 1.8% in May, according to Blend Network. This was down from 3.7% in April. Though the growth was actually negative for the month, the yearly trend was upward.

After the lockdown

Following the relaxation of the lockdown, estate agents and solicitors across the country have found themselves inundated with pent-up demand. This has created upward pressure on prices, as would-be buyers look to force their sales through with a hefty injection of cash. However, there will come a point where this pent-up demand is exhausted, following which, many experts predict, house prices could once again fall to their previous levels.

 Measures taken by the government to stimulate demand

The government is keen to keep demand high, as a collapse in the housing market could have dire ramifications for the economy more broadly. Among the measures introduced is a cut to stamp duty, saving would-be buyers up to £15,000 if they decide to move before the end of the financial year. This has forced many would-be buyers to bring forward their plans, for fear of missing out on the giveaway.

What about Holiday Homes?

All of these market forces are acting upon the holiday homes business, too – which has enjoyed a similar surge in sales since the relaxation of the lockdown. While the definitive measures will take a while to come out, the anecdotal evidence suggests an almost overwhelming spike in activity. According to Park Holidays, a holiday-homes provider, the demand has been unprecedented: “We are staggered by the level of interest in people keen to buy their very own holiday home,” said a representative. “Sales during the last 3 weeks have been almost double that of the previous year and the demand is still strong. “

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Archives, Global Trade Daily, News, Special Reports

Team Leadership in the COVID-19 World

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In 1933, when FDR delivered his first inaugural address, U.S. unemployment stood at 25%, and 7,000 banks had folded in three years. Even as he cautioned his fellow Americans that “the only thing we have to fear is fear itself,” he also conceded that “only a foolish optimist can deny the dark realities of the moment.” The realities of that moment still appear at this instant to be grimmer than those of the current one. Yet with a staggering 26 Million American filing for unemployment over the last five weeks, it’s challenging to dismiss projections of jobless rates reaching or even eclipsing the Depression-era peak that confronted FDR on that very first day of his presidency.

Today’s Americans may not emerge from the coronavirus siege embracing anything approaching the extreme of those directly impacted by the Great Depression, and no reduction in federal responsibilities in the current situation is likely to take the country back to pre-New Deal mode. However, it would be unwise to assume that the severe jolt to our sense of physical as well as material well-being inflicted by this crisis will leave no mark on our human behaviors going forward.

Obvious ones that may never return include handshaking (a tradition long gone in Japan), full-service toll booths, buffets, and sadly free samples at Costco. However, as we dig deeper into the business world, there are less obvious ones that can transition into new ways of doing business. This article seeks to highlight letting go of the past and what to look for in the new COVID-19 World.

We have often heard two widely accepted quotes that seem to contradict each other. The first describes a stonecutter who strikes the rock 100 times with no result. However, on the 101st blow, he sees the rock split. In short, it was not the 101st blow alone that split the stone, but the 100 that went before reinforcing the message of persistence and “staying the course.”

However, the second quote is that the definition of insanity is continuing to do the same thing again and again and expecting different results. The message here is if what you are doing is not working, change what you are doing.

In this COVID-19 World, the question the entrepreneur faces is when to persist and when to change course. The answer depends on the circumstances. To be successful in business in today’s world or any other endeavor, you must be willing to persist when times are tough.

Like the stonecutter, you must be willing to continue working hard through patches where there are no visible results. At the same time, success also requires that you be ready to change course when the current path is not getting you where you want to go, especially during a pandemic. Pivoting now and reinventing yourself may help you thrive later.

Depending on the type of business, we see shifts and pivots in commercialization strategies to help organizations recapture, maintain, and ultimately grow revenue. Obvious ones include storefronts to Direct to Consumer or “you come to us” vs. “we come to you,” adding guaranteed supply of hard to get essentials into unique offerings. Less visible but impactful pivots for CFOs include choosing profitability overgrowth. Government Subsidies, forgivable loans, and grants are the preferred option during these times vs. dilutive funding, and traditional bank business loans or lines of credit.

Looking inside and redefining, your organization should include using this crisis to define a new mission. Instead of ducking from the crisis, refine your company, and embrace it. Externally getting to know your clients better and looking at your client’s challenges from an outside perspective is essential. From a business development standpoint, look ahead at tomorrow’s needs. Ask the question: “What’s my unique selling proposition, and what should it be?” This will allow your organization to pivot and redefine itself appropriately.

Most importantly, believe in your business! See the light at the end of the tunnel. The changes you make to your business model will eventually add to the bottom line and improve profitability. When you believe your business can make it now, you will be a stronger, more resilient, less vulnerable company for the future.

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By Frank Orlowski, Founder and President Ation Advisory Group| frank@ationadvisory.com | New York, NY USA

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Air Cargo, Archives, Global Trade Daily

Global Private Jet Predictions after COVID-19

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The global pandemic has changed the way we travel. Concerns regarding the hygiene of commercial aircraft and how crowded terminals may play a role in the transmission of the virus have taken the aviation industry by storm. Today, six months after the initial reports of coronavirus cases in the western hemisphere, there are enough trends to project how the aviation industry will behave in a post-pandemic environment. Private air charter solutions company Monarch Air Group weighs in.

Change of perception for private aviation

Before the coronavirus pandemic, the majority of the population still perceived private aviation as a luxurious means of transportation reserved only for the wealthy. With a change in travel restrictions and growing safety concerns, this segment has started to serve a new pool of travelers seeking a reliable and secure way to fly, far away from the concerns of a commercial flight. It is possible that not all of them will continue flying private when they find out commercial aviation is safe once again (whenever that might be in the future), although some of them might continue flying at least on an occasional basis. This change in perception only benefits the industry as a whole.

Turboprops have demonstrated their value

Linked to the previous topic, turboprops, as the most cost-effective option for a private flight, has been the go-to option for most new travelers in this segment. Especially for shorter routes of less than 3 hours, single and twin-engine turboprops serve as the perfect transition from commercial aviation. Passengers get to use a private terminal, they escape the crowded airports, they get to choose who they travel with, enjoy a comfortable aircraft and almost at half the price than a small jet. Turboprops like the Pilatus PC12N and the King Air 350i have demonstrated their real value as private air workhorses and will continue to do so in the foreseeable future.

Diversification as a safety net

The flexibility of private aviation has been a coveted asset worth paying for. The possibility to depart from almost any airport and to choose from thousands of different aircraft at any moment is second to none. Nevertheless, the global pandemic has demonstrated that private aviation also provides flexibility to the global travel industry, and not only to the private passenger, having served governments with repatriation flights, humanitarian missions, and cargo charters. This diversification has also allowed the different players in the industry to maintain the number of operations and flight hours, proving that the flexibility of this market goes way beyond luxury.

Carbon footprint discussion

Private aviation has been publicly scrutinized due to its carbon footprint compared to commercial aviation, even though leading private air companies have implemented programs to offset the carbon emission. While the amount of fuel burnt by a private jet is a lot less than a commercial aircraft, and therefore CO2 emitted is also a lot lower, private planes carry fewer people, sometimes even one per route, meaning they’re considerably less efficient, and the personal carbon footprint of passengers who choose to travel this way is much higher. The previous discussion has come to a standstill amidst the coronavirus pandemic (and probably will continue this way), because the main concern today is maximizing safety (avoid infection), while maintaining high levels of efficiency, something that commercial aviation cannot guarantee in the near future.

Full recovery of the market

While diversification is a great asset, the core demand of this industry is generated by business trips, sporting events, weddings, and overall leisure. Although Monarch Air Group has reported a sustainable growth in demand during the last two months, until the aforementioned events don’t regain full shape, it is hard to determine when full recovery of the market will occur, because they all depend on local restrictions.

Private aviation has passed the test imposed by COVID-19 by demonstrating its diverse pool of services, its safety and cost-efficiency, demystifying what so many commercial passengers thought before experiencing this service, positioning itself as a more approachable and accessible means of transportation. It is safe to say that private aviation will have a higher and more diverse demand than before the outbreak, fueled by new clients that have recognized that flexibility, safety, dependability, and superior customer service doesn’t necessarily mean a higher price.

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Established in 2006, Monarch Air Group is a leading provider of on-demand private jet charter, aircraft management, and long-term aircraft lease. Among Monarch’s customers are Fortune 500 corporations, leading entrepreneurs, Government agencies, and world-leading NGO’s.

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Archives, Global Trade Daily, Special Reports

How To Make Your Business More Financially Sustainable after COVID-19

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The coronavirus outbreak in December 2019 came at a time when the global economy was trying to get its act together after being slowed down for a while by trade tensions, especially between China and the US. The much-needed transition towards sustainable manufacturing and clean energy has also played a part in slowing down the global economy, but for a good reason.

When the virus checked into town, all the gains we have experienced over the last decade were turned upside down. Businesses now have to address the health, social, and economic impacts of the coronavirus on top of the already existing geopolitical (e.g. Brexit) issues that impact the business.

Supply chains all over the world have been disrupted by the pandemic, millions of working citizens infected, hundreds of thousands dead, and billions of potential customers rendered jobless. To compound these miseries, most markets are under lockdown, and no one knows for sure when life will get back to normal. The big question now remains: How will business people make their businesses more financially sustainable after COVID-19? Here are 5 measures you can take as a business leader to counter the financial impact of the coronavirus:

1. Leverage employment organizations when expanding internationally

If your intentions were to expand to international markets, or if you had already opened shop overseas, you can collaborate with professional employment organizations to source for and compensate employees. You can, for example, count on a Japan employer of record to help you to establish presence and support personnel in Japan cost-effectively and efficiently. They will help you hire new talents, manage existing staff, and navigate the legal requirements and obligations that come with business ownership in Japan. When you don’t have to worry about managing employee payrolls and compliance issues, or to hire an HR department for that matter, you are able to save on overhead costs until your business recovers fully from the coronavirus shock.

2. Re-evaluate your supply chains

The coronavirus has grossly exposed the vulnerabilities of global supply chains. Companies that depended entirely on Chinese manufacturers or raw materials have been forced to close down temporarily with some closing shop completely. Businesses that will survive this pandemic have to look beyond first- and second-tier suppliers, especially for their key products’ raw materials, and expand their supply lines to bring in more players. Businesses also have to expand their markets. Having a contingency “plan B” will not be enough. You will need to diversify in all aspects of your business so that if one line closes or is unable to recover fast from the pandemic, you will always have alternatives.

3. Reach out to customers

Do everything that you can to retain your main customers. If they owe you, don’t be quick to pressurize them to pay because they are also struggling to get back on their feet. You can loosen repayment terms a bit to accommodate the new normal- this is one of the small prices you may have to pay in order to keep your business afloat. Your lenders are probably doing the same for you. The most important thing here is to maintain open communication lines with your debtors, creditors, and other clients and being honest with one another in case of any payment difficulties. In the long run, when you are all back on your feet, you will still have your customers, and cash will start flowing in as it used to.

Reaching out to customers also means reaching out to new markets, or offering more products to your existing market. If your existing market isn’t recovering as fast as other markets, it is okay to move your business elsewhere. If one of your competitors has closed shop, this is your chance to move in for their customers. Be courageous to fill in every gap that the virus could have created within your market, and to explore other options that could bring in additional cash provided they won’t compromise your brand identity.

4. Update your terms and conditions

There are some terms and conditions that you have held on for too long, some of which have left your business vulnerable during the ongoing pandemic. This is the time to scrap them all and create better terms that protect you from future crises. In fact, you would rather pull out of a contract now and pay the cancellation fee, rather than push on with it and incur losses in the end.

Going forward, you need to take a proactive approach in revenue, employee, clients, and commercial risks management. Crisis management is a process; not just an event. You will need all the teamwork and support that you can get if you are to pull this off. Flex your network and get rid of any dead weight.

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Archives, Global Trade Daily, News, Stories

COVID-19 will Change Job Recruiting; Here’s How Companies Need To Adapt.

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The COVID-19 pandemic has upended the business world and put tens of millions out of work in the U.S. At the same time, it’s caused a seismic shift in the way many companies operate, the biggest change being that more business functions are done while working remotely.

But along with the work-from-home aspect, the fallout from the coronavirus will fundamentally change recruiting and hiring practices long after the pandemic has passed, says Jack Whatley (www.humancodeofhiring.com), a recruiting strategist who specializes in creating employer branding campaigns.

“Social distancing, shelter-in-place orders, and the forced closing of businesses will change the way we look at employment,” Whatley says. “No longer will the promises of changing the world attract the modern workforce. Safety and job stability are at the top of the mind for the modern job seeker – and that changed what they want in a job.

“Businesses will have to become employee-centric as well as customer-centric. The companies that have the ability to capture that part of the employee message, put it into their employer branding, and reinforce it throughout recruitment marketing campaigns are going to be the companies moving ahead in a much different world.”

As states begin different stages of reopening for business, Whatley breaks down what companies should do when recruiting, hiring, and re-hiring:

Create a communication campaign. “If you’re a company that laid off employees with the hope of bringing them back, you have to reach out with genuine communication that goes the extra mile,” Whatley says. “It should let them know in detail what steps the company is taking. Those people who were let go unexpectedly and lived paycheck to paycheck, they’ll be emotionally drained and stressed. A company bringing them back needs to make them feel valued so the company doesn’t lose that relationship.”

Be careful in rehiring. Rehires won’t be a straightforward process for some companies. Circumstances won’t allow them to rehire or bring back from furlough all of their former employees. “Employers must be cautious in determining who to bring back to the workplace; they need to mitigate the risk of potential discrimination claims, which could be based on the decision not to bring back certain employees,” Whatley says. “Employers will need to have a legitimate, non-discriminatory reason for choosing which employees to rehire. Those reasons include seniority, operational needs or documented past performance issues. Employers should document their decision-making process now, before deciding who will be invited back.”

Focus on expanded employee rights. Whatley thinks a new appreciation for workers may be emerging as state and local governments mandate paid sick leave and family leave during the outbreak. Some companies are shifting their focus to hourly workers as well for those perks. “This change could become permanent,” Whatley says, “as organizations work hard to hire new staff and increase retention rates.”

Streamline the process. “If the recruiting process gets backlogged,” Whatley says, “it causes problems for your current employees and an under-staffed company. It becomes frustrating for them, because they’re forced to work overtime, and the big workload kills morale and increases turnover.”

“Most companies look at hiring people as a transaction – they need to fill a seat,” Whatley says. “They place a job posting and fill the job. In the new world, that will no longer be the case. To get the best talent, companies will have to engage people sooner, more thoughtfully, and put a higher priority on what employees value most in a job.”

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Jack Whatley (www.humancodeofhiring.com) is a recruiting strategist who specializes in creating employer branding campaigns that position companies as the employer of choice in their market. He is the author of the upcoming book Human Code of Hiring: DNA of Recruitment Marketing. Whatley is known for creating successful recruiting and employer branding campaigns and delivering highly-qualified applicants. His Driver DNA Hiring System has made Whatley the No. 1 people ops recruiting strategist for truck driving recruitment in the world. Together with his partner, daughter and innovation wizard Anika Whatley, they have expanded into other industries and have been working to perfect the Human Code DNA Hiring System, which uses the latest technology to improve the quality of worker life and enhance recruiter productivity.

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Archives, Global Trade Daily, In The News

5 Tips to Help You Lead & Experiment During Crisis

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As a leader, during COVID-19 (or any crisis) it can be hard to find your feet and to feel confident in your path. You may feel inadequate, unsure, and out of your depth. That is to be expected. This is leadership like we have never seen before. So many businesses are closed or trying to find new ways of doing things. I believe almost every organization feels like a start-up right now. Uncertain times need new kinds of leadership. We don’t have the answers, only questions, and still, we are asked to be leaders. Being experimental in your leadership approach will help you try things, learn from them, and figure out your next experiment.

These tips will help you find a new center for yourself as a leader:

You are not responsible. It should go without saying, but this is not your fault. This is a global challenge that doesn’t have clear answers. Your people may want you to have answers, but you won’t and you can’t. They will want certainty about their jobs, their income, and their lives. You can’t promise them the future. Encourage them to do their job today and let them know you have compassion but cannot be the answer to their future. Give up being an all-knowing leader and be human. Practice compassion and be collaborative to help your team makes sense of the crazy.

Get bad news out of the way fast. If you have lay-offs and reorgs to do, do it quickly. Make a plan–even if it is a bad plan and clear this from your “to do” list. You will be a better leader with clarity. Kudos if you can be compassionate while you do it. There are some businesses that will not survive this. Don’t hide your head in the sand like an ostrich. Embrace information and communication even if it is bad news. Work on being a good leader in bad times. Figure out what being a good leader means to you. Kindness goes a long way when you are delivering bad news.

Think about a timeline. What is important 1 week from now? What is important 1 month from now? What is important 1 year from now? Some organizations need to be extending their timeline (How will we emerge from this crisis?) while others are busy changing to meet day to day needs (What do our clients need today?). Make sure to orient your thinking daily and consider multiple time frames. Make time to consider your leadership path before you face a day of decision making and are faced with the feelings and challenges of others. Find your own true north as a leader.

Be kind and firm. Your team members may be spinning and scared. Be empathetic and then ask them to get back to their jobs and produce good work. Having meaningful work is a privilege in these times and you can ask them to be achievers right now….today. You can deliver groundedness and purpose as long as they are working. There can be compassion for the challenges they face (kids at home, new environment, etc) but don’t let them off the hook. They are being paid to provide work. Your insistence on them delivering work is part of the work of leadership right now.

Practice extreme self-care. You are your own strongest asset. Experiment to strengthen your physical, mental, emotional, and spiritual health. Reach for the salad and smoothies instead of the martinis and chocolate cake. Exercise. Sleep. Meditate if that works for you. Journal or sit and think. Pause. Ask for help and love from friends. Schedule a virtual happy hour with friends or colleagues. Try and go deeper than you ever have before with your self-care. You have never needed to care for yourself as you do today. Experiment with giving yourself what you need.

You will get through this. You will learn from this. You will do your best and you will do your worst in this. As an experimental leader, it is important that you stay engaged in the struggle of leadership. Try and fail and dust yourself off. Figure out the change you want to see and what the barriers are. Figure out an experiment. Collect data. Figure out what you just learned. Ask, “What is my next experiment?” Go experiment again.

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Melanie Parish is a public speaker, author, and Master Coach. An expert in problem-solving, constraints management, operations, and brand development, Melanie has consulted and coached organizations ranging from the Fortune 50 to IT start-ups. She is the author of The Experimental Leader: Be A New Kind of Boss to Cultivate an Organization of Innovators. For more information, please visit, www.melanieparish.com, and connect with her on Twitter, @melanieparish.

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Archives, Global Trade Daily, Imports/Exports

THE GREAT DISTANCES TRAVELED SO YOU CAN STAY AT HOME

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Baking queries are popping up all over Google, which reported that a top trending search was “how to make banana bread.”

As millions of people across the United States are ordered to stay at home and shelter in place, many have found they have a surplus of free time on their hands that was once filled with commuting, socializing and generally being somewhere other than their house or apartment. So what to do? Of course there is enough content on online streaming and gaming services to keep us enthralled for many lifetimes, but a lot of people are trying to make the best of the hand they’ve been dealt by using the time to learn a new skill, create something, or better themselves.

The activities we are filling our time with while confined to our homes show just how monumentally global our influences, choices and opportunities really are. While restricted to our small slices of the world we have the opportunity to cook food using ingredients and make things with materials that have traveled huge distances. And we can learn the skills and practices that are part of cultures thousands of miles removed from our own, all thanks to trade – both historical and present.

Globally-Inspired Baking

Whipping up delicious baked goods is comforting and rewarding. Little is more satisfying than making your own bread from scratch – it’s the nearest most of us will come to alchemy, and it’s utterly delicious. In fact, so many Americans are turning to this source of comfort that flour and yeast are running low and producers are fighting to keep up with demand.

Bread isn’t the only option available for home chefs. Trade provides a gateway to international culinary influences, allowing us to import the knowledge of grandmothers the world over. A few simple ingredients such as flour, yeast, fat and sugar (but beware the tariffs!) are all you need to make authentic Italian pasta, fluffy Chinese steamed buns or mouthwatering Colombian arepas. A quick Internet search will help you find family recipes to master yourself.

If you fancy something a little sweeter, how about a plate of fresh-from-the-oven chocolate chip cookies – what could be more American? With cocoa beans imported from West Africa and vanilla pods from Mexico and Madagascar, you can again credit international trade with bringing you the ingredients to craft culinary magic. And for classic banana bread, your bananas are probably from Ecuador, the Philippines, Costa Rica, Colombia or Guatemala, and their complex trade story goes much further.

Knitting Together Cultures

Time at home has also reignited interest in creative outlets like painting, writing and crafting. Knitting, crochet and embroidery are some of the most popular activities we’ve been picking up to keep our hands busy, serving both as something to do and a great way to help calm anxious minds. Although only to be used when there is no other option, generous crafters in some communities are helping out by sewing homemade masks, reminiscent of the wartime “knit your bit” movement to get socks and warm clothing to front-line troops.

knitting and sewing

If you’re looking to knit up something cozy during isolation, wool from the animals of the world has you covered. The alpacas and vicunas of the Andean Highlands of Peru are a valued source of soft and squishy wool, and in South Africa Angora goats (originally from Turkey) are farmed and shorn for Mohair. And of course, humble sheep the world over offer up their coats. The many different breeds from places such as the Falklands, Spain, Australia, or the UK produce a huge variety of wool for our handmade sweaters, hats and scarfs.

Thanks to trade and innovation, numerous plant-based yarns are also available, beyond the obvious cotton. Great for crafting light and airy creations, they include materials such as raffia made from the fibers of raffia palms native to tropical Africa and Madagascar. You could also pick up yarn made from wonder-plant hemp, whose top producers include China and Canada, or yarn made from Australian eucalyptus, sustainably and ethically sourced.

Staying Healthy Inside

The closures of gyms and fitness studios and the stresses of staying cooped up mean people are trying to find ways to stay fit and healthy while they isolate, including exercising at home and experimenting with healthy foods.

Though you can no longer take a spin class or use the elliptical at your local gym, workouts that can be done at home have seen a surge in popularity, and many group fitness classes are trying to transition to providing virtual content. Many of these fitness classes and practices originally came to the United States from abroad.

Yoga mats have seen a spike in popularity on Amazon as people turn to the ancient Indian discipline to find their inner peace amidst the turmoil. One in three Americans have tried yoga at some point, and that statistic seems likely to increase even further. Perennial favorite Pilates is another way people are trying to stay healthy. It is now practiced worldwide but was originally brought to North America by German immigrant Joseph Pilates.

Young mother doing yoga with 3-years girl in front of window. Downward facing dog asana

Another way to combat the negative effects of social distancing and lack of variety is to seek out healthy foods to consume, like superfood products that claim to boost immunity or calm anxiety.

Thanks to international trade we now have access to all kinds of foods that can help us fuel and feel better. One of these is Japanese Matcha, a green tea powder made from tea primarily grown in two regions in Japan that has been a prominent part of culture there for centuries. Purported benefits include boosting brain function and helping to protect the liver and heart health. Once almost solely enjoyed in Japan, it is now available across the United States, and even at Starbucks and Dunkin’. Another popular superfood is turmeric, U.S. imports of which have surged in recent years from $2.5 million to $35 million between 2001 and 2017. It has been enjoyed in India for over 4,500 years for its ability to fend off illness but now it’s available in any grocery store to add to a home-cooked curry or to use in a turmeric latte.

International Trade Helping Our Domestic Lives

Having to distance yourself from friends and loved ones and stop doing activities you enjoy is undoubtedly tough. However, we can be thankful for – and find pleasure in – what we can still do, thanks to international trade and a globalized world.

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Alice Calder received her MA in Applied Economics at GMU. Originally from the UK, where she received her BA in Philosophy and Political Economy from the University of Exeter, living and working internationally sparked her interest in trade issues as well as the intersection of economics and culture.

This article originally appeared on TradeVistas.org. Republished with permission.

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Archives, Global Trade Daily, Stories

How Companies can Rethink Supply Chains to Deal with Disruptions

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The coronavirus has disrupted U.S. companies in many ways, and nearly three-fourths of them have seen their supply chain significantly affected.

While China has begun slowly reopening as the number of coronavirus cases there decreased in recent weeks, reports of the illness shot up in other countries, and the epicenter of the pandemic shifted to Europe and then the U.S. Thus, multiple supply chains have been compromised as the outbreak spreads, and there’s no telling when those links in the various chains will operate at normal capacity.

“There are waves of effects coming even if Chinese manufacturing gets back to full-go,” says Hitendra Chaturvedi, a professor at the Supply Chain Department of W.P. Carey School of Business at Arizona State University and an expert on global supply chain sustainability and strategy.“As the coronavirus has spread globally, drops in different trading partners’ ability to supply is felt everywhere.

“What this is showing, especially in the U.S., is we need to reassess supply chain strategy and make it stronger to withstand unforeseen, major disruptions.” Chaturvedi outlines some possible outcomes in U.S. supply chain strategy as a result of the coronavirus:

Learning that cost is not the only consideration. Chaturvedi says that when companies in the future plan their overall global supply chain strategy, they may decide that paying more to establish a more resilient and flexible process would be worth it by reducing risk. “Companies typically find the lowest-cost supplier, but if you have a single source, you’re vulnerable, and that’s what’s happening now,” Chaturvedi says. “This will move companies more toward mitigating risk. That requires making investments. They could stabilize their supply chains by enlisting alternative suppliers, boosting inventories or investing in more diverse ways of distribution.”

Localizing more manufacturing and transporting. “Dependence on China for their manufacturing has put small and midsize businesses in jeopardy,” Chaturvedi says. “The pandemic exposes the vulnerability of companies that rely heavily on a limited number of trading partners. What will result is businesses will look to restructure their global supply chains, and some companies will look at localizing more than they would have in the past. A shift in that direction had already started during the U.S.-China tariff fight.”

Planning for future disruptions. Another result of the pandemic’s impact on supply chains is it will compel companies to anticipate disruptions in the future and build in quick responses to their supply chain. This involves a process called mapping, in which companies engage suppliers in order to better understand their sites and processes. “It’s imperative for businesses running a global supply chain to be in the know about news that could cause disruptions,” Chaturvedi says. “You have to be proactive and not reactive. Knowing where the disruption will come from and how that will impact their products allows companies to lead time and the ability to create a mitigation strategy.”

Utilizing technology. Chaturvedi expects to see a rise in the use of AI, chatbots, the internet of things, and robotic process automation to facilitate supply chains. “This will be done not only as a pretext to bring manufacturing jobs back from China,” Chaturvedi says, “but also for purely selfish reasons because bots do not get sick.”

“The impact of the coronavirus pandemic on supply chains has given new meaning to the word ‘disruption,” Chaturvedi says. “We’ve never seen anything quite like this, and businesses can learn a lot from it that will help their supply chain process in the future.”

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Hitendra Chaturvedi  (www.wpcarey.asu.edu/people/profile/3541031) spent over 30 years in progressive technology leadership positions with Microsoft, Newgistics, E&Y e-Business and A.T. Kearney. Chaturvedi also built a $100 million software company in India, GreenDust, where he implemented proprietary reverse logistics software at Amazon, Flipkart (Walmart), Samsung, Panasonic and Whirlpool. A computer engineer with a master’s degree from Louisiana State University and an MBA from Southern Methodist University, Chaturvedi has been widely covered in the media and is a subject matter expert on global supply chain strategy, sustainability in supply chain, reverse logistics, ecommerce, artificial intelligence and machine learning. Now a professor at Arizona State University, Chaturvedi has been a visiting professor at Southern Methodist University, University of Texas-Dallas, Penn State and Purdue.

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Archives, Global Trade Daily, Ocean Ports

Container Availability: From Shortage to Congestion?

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Container ports all over the world, with the exception of China, are faced with imminent congestion when a multitude of boxes sent for shipment from factories in Asia arrive at their import destinations. As the infection rate of the COVID-19 in China declined and production resumed, a large number of containers that had piled up in China have finally sailed to Europe and North America. 

With Container Availability Index (CAx) values of 0.17 (20DCs) and 0.33 (40DCs), it seems like the Port of Shanghai is back at full productivity. In the past couple weeks, containers had piled up – CAx values of greater than 0.6 indicate a surplus of equipment – due to multitudinous blank sailings, something that would normally not happen often. Being able to forecast the development of the next 3 weeks, the CAx values for Shanghai will decrease from 0.41 for 20DCS in week 14, indicating that equipment will become more scarce again.

However, the effects of COVID-19 have dramatically affected consumer demand in the US and Europe. Buyers have begun to cancel orders as most of these countries are now in a severe lockdown situation and warehouse capacity is being maxed out. The incoming containers are most likely causing congestion, and incurring storage and demurrage charges at, for instance, the Port of Los Angeles or the Port of Hamburg.

With CAx values of 0.38 (20DCs) and 0.57 (40HCs) for Hamburg and values of 0.82 (40DCs) and 0.3 (40HCs) for Los Angeles, the Container Availability Index also forecasts increasing equipment volumes in these ports. The forecast takes millions of containers tracked through Container xChange into account, helping shipping companies make container sale, lease or repositioning decisions. 

The next couple of weeks will tell us if the COVID-19 situation eases in the western world. To remain competitive, especially European freight forwarders and shippers are expected to increase their usage of SOC containers in order to avoid demurrage charges. 

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What Employees Are Expensing During the COVID-19 Outbreak

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As the situation surrounding COVID-19 has progressed, more travel restrictions and social distancing practices are being implemented every day. More and more companies are implementing work-from-home policies to adapt to the changing situation.

We’ve been tracking the data since the beginning of the crisis to help your company ensure employee health and safety and make essential decisions around expenses.

Here are a few of the most significant changes we’ve seen.

COVID-19 expenses haven’t shown any sign of slowing down

In our last blog, we noted that COVID-19 expenses skyrocketed, and we expected them to fall as trip cancelations began to taper off. However, these expenses have shown no sign of slowing down. COVID–19–related expenses have doubled from the week ending March 7 to the week ending March 14, with trip cancelation and work-from-home expenses being the primary causes.

Number of claims

Submitted expenses vary by industry

Although changes to travel plans and cancelations still make up over half of all COVID-19-related expense claims overall, the trends change when you look at specific industries.

In the finance and software industries, half of the expenses are related to travel cancelations, and the other half are work-from-home expenses.

In the consumer goods, manufacturing, and pharmaceutical industries, masks still make up 15 to 20% of expenses but are otherwise in the low single digits in other industries.

The growth in expenses also varies by industry.

Work-from-home charges have increased dramatically; masks have fallen

Work from home expenses have grown the most, increasing 3.5x since last week. These charges are mainly related to “remote office setup” or “supplies for remote work,” and include accessories like printers, ink, headphones, and HDMI cables.

In our own workforce, we’ve noticed that everyone has a different set-up at home, ranging from at-home offices to sitting with their spouse at the dining room table or even sitting in bed with their laptops. It’s essential to employee productivity and ergonomics to help everyone make the best of whatever space they have.

Mask expenses have fallen – there was a peak in mid-February, then another dip, and a second peak at the end of February.

What does this data mean for my company’s expense policy?

We hope this data can help you consider the appropriate response to COVID-19 in your organization and how you can best support your employees. It’s clear from the above data that work-from-home expenses are increasingly common, and will likely continue to increase over the next few weeks as more companies continue to close their offices temporarily. We’ve also noticed that several companies have created specific expense types to track COVID-19 spending more closely. Others have created expense categories for their accounts payable departments to pay temporary workers more quickly in times of uncertainty.

If you’re unsure of what you should allow in your expense policy in response to the current climate, we’ve outlined some best practices on work-from-home expense policies from our peers and customers. In the meantime, we hope you and your company are taking the necessary precautions to ensure the health and safety of your employees during this unsettling time.

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Anant Kale is a CEO at AppZen, the world’s leading solution for automated expense report audits that leverages artificial intelligence to audit 100% of expense reports, invoices, and contacts in seconds.