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UPDATED 10.30.2020: COVID-19 impacts on global supply chain logistics

coronavirus impacts on global supply chain logistics

With continued challenges in 2020, Border States is committed to keeping our customers updated regarding supply chain impacts and other market trends. While the situation remains fluid, below is an update based on the latest information we have today and is accurate to the best of our knowledge. We are working diligently to provide you with the most current information possible, knowing this information could change at any moment.

coronavirus impacts on global supply chain logistics

Product and Supplier Updates 

Several product categories continue to have pandemic driven constraints. Many production facilities in Mexico, India, Brazil, and in some cases, domestically continue to be challenged with maintaining capacity due to COVID-19 community spread, increased social distancing and high employee absenteeism.

Many of these manufacturers are nearing original production capacity levels but continue to work through significant backlogs. Several continue to add additional capacity in the United States on impacted categories, but we do expect continued disruptions into 2021 across many categories.

Most notable categories with continued supply disruption include:

  • Circuit breakers – most notably 2 pole, 3 pole, GFCI, CAFI and combo breakers. 
  • EMT Fittings – 1/2”–4” compression and set screw connectors (produced in India). 
  • Weatherproof boxes
  • PVC fittings and boxes
  • Box pads fiberglass and enclosures have seen extended lead times of 20+ weeks
  • Utility pole line construction material and hardware
  • PPE products – Most notably disposable respirators and disinfecting sprays and wipes. 
  • Power fuses. 

Natural disasters continue to put additional strain on the supply chain. The area in the Gulf of Mexico impacted by Hurricane Laura in late August is home to many of the largest polyethylene resin producers in the world. It is used on manufacturing products such as PVC pipe and fittings, medium and high-density natural gas distribution pipe and HDPE conduit. PVC pipe lead times remain extended at 8–12 weeks due to resin supply and high demand.

In addition to PVC products, many utility product categories remain constrained due to storm restoration and strong demand in 2020. Pole line hardware, fiberglass cross arms, low and medium voltage underground and overhead cable and transformers all continue to see extended lead times and material availability challenges. Demand for utility products is forecasted to remain strong into 2021.

 

Freight Updates 

We are staying in close contact with major third-party freight carriers and we continue to see concerning trends in the freight industry. With less-than-truckload (LTL) and full truckload (TL) shipments, capacity remains tight while demand is increasing.

The U.S. Payroll Protection Program (PPP) saved many small trucking companies, but many drivers under the PPP have yet to return to driving. Increases in e-commerce demand is also putting constraints on capacity, including small parcel and the ability to get overnight and two-day guaranteed deliveries in some cases.

Many of our suppliers are shipping less frequently and working to further consolidate shipping. This, coupled with the capacity issues, is resulting in extended shipment lead times. This could worsen heading into the holiday season.

 

Market Indicator Updates 

Economic uncertainty continues to create volatility in commodities and the markets.

  • U.S. GDP grew over 30% in the second quarter but has yet to fully rebound to prepandemic levels. With growing COVID-19 case counts and no further federal stimulus plan in place, growth forecasts are highly uncertain for the balance of the year.
  • Copper reached a two-year high this month, trading at over $3.10 per pound this week. Increasing Chinese demand and continued labor disputes in South American mines are the main drivers.
  • PVC resin pricing remains high due to increased demand and reduced capacity as resin producers continue to recover from Hurricane Laura.
  • Increasing gasoline reserves and continued weak demand due to the pandemic have resulted in the Brent and West Texas Intermediate (WTI) indexes trading below $40 per barrel this week.

 

Our number one priority remains the health and safety of our customers, vendors and employee–owners. With all branches and most counter operations open, we have put in place additional safety measures to ensure the safety of our customers and employee-owners. Our curbside pickup method remains in place. We continue to maintain a no contact delivery policy for all Drivers. Additional information is available on our website regarding these measures and plans focused on health and safety in our operations. 

We have also published an online resource page with more information about our current safety measures and featured products and solutions.  

If you have any questions, please reach out to your Border States Account Manager for additional information or contact us online. 

  

Related Articles: 

New OSHA guidelines on COVID-19 safety for construction sites | 5 key takeaways 

Border States’ response to the COVID-19 outbreak 

Cleaning and disinfecting tools | 4 tips for keeping your jobsite safe during the COVID-19 outbreak 

 

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