Covid shutting down China factories and ports – things changing by the hour
China which has a zero tolerance policy towards Covid this week has locked down several key cities including Shenzhen which is a major manufacturing and electronics hub.
This is important for Ecommerce sellers because many many factories are being affected in and around these areas.
I spoke to 8 Figure Seller Chris Davey who lived in Shenzhen and he shared that the things in Shenzhen are changing by the day if not by the hour.
“What we can be good today, will be bad tomorrow.”
According to Chris, All factories in Shenzhen are shut down except Foxconn. They have a closed loop where employees are not allowed any outside contact away from the work facilities
The nearby Port of Yantian (major port of Shenzhen, Dongguan, and surrounding provinces) had been shut down for several days. It was just announced within the last 24 hours that it has been reopened and workers are now allowed to resume loading containers.
In terms of the city of Shenzhen itself, as of March 18, 2022, 5 districts have been allowed to open up while the remaining districts are closed. These 5 districts have allegedly had no cases.
However parts of the major highways are fenced off around the closed areas. This will make moving products very tricky to get from factories to the ports.
Another key consideration from the sourcing side is even if your factory is open for business, if one of your products subcomponent’s factories is shut down, then your whole production may be stopped.
In other words your supply chain is only as strong as your weakest link and if any of those links (raw materials, subcomponents, trucking, port and container loading) then your deliveries will be affected.
What is Chris’ advice to sellers looking to minimize the disruption?
He recommends “Keep in touch with your supplier to find out what’s going on with them.”
In terms of logistics, “even though the container port may be open – getting the container there may be tricky!”
As you’ve seen, China sourcing is changing by the day and I’d like to invite you to a live training session that I will give at Seller Fest Online on March 28, 2022. In this training you will learn:
- The state of sourcing from China
- The Covid effects
- Raw Materials
- Shipping lead times
- Recommendations to optimize your sourcing and maximize your profitability
Recently, I noticed you had the opportunity to get a Free Pass to the 7 Figure Seller Summit but decided not to get it at this time.
Could you tell me why in this short 2 minute survey?
Thanks in advance.