Supply Chain Impact Due to Coronavirus
FOR IMMEDIATE RELEASE:
Supply Chain Impact Due to Coronavirus
February 13, 2020
Dear Valued Customer;
Many of the Chinese coil roofing nail and building material manufacturing plants have gradually re-opened after the extended Lunar New Year Holiday that was mandated by the Chinese government to help minimize the spread of ‘COVID-19’. Being open does not necessarily mean business as usual. Even this morning we were made aware that the plastic cap nail plants, which are mostly located in Tianjin, are still not open and are hoping to re-open February 17th and not be delayed further. Here is additional information from our contact with people on the ground in China:
Are the roofing nail plants open? – As of February 10th most plants in Shandong Province, where over 90% of collated roofing nails are produced, have been allowed to re-open. As noted above, most of the plastic cap nail plants, are scheduled at this point to open on February 17th.
Is it business as usual? – Not at all. Most plants have 30%-50% local workers and the rest come from a long distances and in other provinces. The local workers have come back to work. In most cases 30% of the workforce. Migrant workers are mandated to be quarantined for 14 days before they can return to work. The plants have no process for that, so basically many of those workers are not returning to work at this time.
What other issues are effecting normal operations? – Government Inspectors are doing routine inspections, in some cases daily. All facilities must have a plant disinfecting plan in place, with adequate disinfectants, masks, etc., as well as a record keeping system to show the proper procedures are being followed routinely. This can be a real challenge as all of these things may not be readily available.
What about raw materials and actual production? – Steel mostly comes from the Hebei Provence, not Hubei where the infection is, and it is about 500 miles away from the nail factories. At this point the trucks to haul steel are scarce. Some of this is due to the 14 day quarantine required when citizens travel from province to province. Plants do have some limited inventory to allow them to start up but not enough for sustained production. Nail galvanizing lines are expected to start on February 18th.
What is the status of China ports and trucking? – Ports affected by the Lunar New Year extension have continued to report a significant reduction in trucking capacity. The ports of Guangzhou, Shanghai, Shenzhen, and Tianjin are requiring all truckers returning to work to go through a 14-day quarantine period prior to operating a truck. Additionally, when the truckers are moving across province borders they are required to go through a 14-day quarantine period. Trucking capacity will be limited until the quarantine period is no longer required. Dispatching and moving containers is possible but requires an appointment to be made at least 1 day in advance. As usual the local Chinese governments continue to require truckers to have correct permits before conducting each trucking move.
When can we expect to receive our orders? – CMI is the largest direct importer of coil roofing nails into North America. CMI shipped enough nails in 2019 to roof over 125 million homes. We are best equipped to navigate through these issues and keep you informed. If you ordered material prior to 12/24/19, your order was most likely scheduled to ship by February 1st and should be in transit. If you ordered in January most likely your order was to be produced after the Lunar New Year and that is the start of the delays that will be encountered. We think actual real production won’t start until March 1st, so basically 4 to 6 weeks of nail production will be lost. April deliveries will be pushed out to May and May to June, etc.
When can we expect things get back to normal? – If things don’t get worse with this virus situation we can expect that it will take 60 days to get back to a normal cycle. The additional cases that have been identified in the last day or so may or may not impact businesses that already have plans and schedules in place. We think by March 1st the production facilities will be running at 30 to 40% of capacity, and then by April they’ll be back to normal capacity and output. During these times you want to continue to deal with reliable established professionals that provide reliable information you can base your business decisions on. This is a global problem and affects the Supply Chain for many parts of the global economy. As an example, up to 60 container vessel sailings have been cancelled, some of these ships carry 20,000 containers. Additionally some major airlines have cancelled all China service through March at this point. Nails are only a piece of what has been impacted and affects your business.
CMI provides construction and roofing nails from other countries as well. We continue to support your needs with the most stringent quality programs in place and with our own ‘boots on the ground’ to manage our business in Asia. CMI continues to have the largest ready capacity to support the coil roofing nail market. Please reach out to us to discuss any of your construction or roofing nail requirements and options.
Thanks for your support.
Continental Materials, Inc. (CMI) is a national supplier of roofing system component materials and known for BUR (built-up roofing) asphalt with “No Smell”™ odor eliminating technology and its WeatherSeal™ protective packaging, All-Weather™ asphalt felts and coated organic rolls, CMI All-Weather™ modified bitumen rolls, SureGrip™ construction fasteners and roofing nails, Continental’s eco-friendly high density fiberboard roof insulation board and a premium line of SecureGrip™ synthetic roof underlayment products that are sold and used widely throughout the country. CMI has provided value added products and superior service to the roofing industry since 1958.
For more information on CMI products, call (215) 884-4930, visit www.continentalmaterials.com or contact your local CMI Sales Representative.