The coronavirus epidemic in China is threatening global supply chains and events, and the furniture industry is watching.
Fortune magazine last week contacted the Home Furnishings Association for insights.
“We have received notice from various manufacturers and suppliers that they are extending the Chinese New Year (holiday) for at least one extra week to accommodate the quarantines,” the association’s president, Jesús Capó, told the business publication. Capó is chief information officer for Florida-based Top 100 retailer El Dorado Furniture. “We will run a little short on some products — but if it continues, after a while you are going to have to find products somewhere else,” he said.
[Jesús R. Capó elected HFA president for 2020]
The article, “As coronavirus spreads, even furniture sellers in the U.S. are starting to feel the fallout,” published Feb. 14, also quoted Jameson Dion, vice president of global sourcing for another Top 100 retailer in Florida, City Furniture.
‘We anticipate a material impact’
“We have a buffer to deal with unforeseen circumstances, but if we continue to see delays, we may not have enough stock or have to source inside the country,” Dion said. “We anticipate a material impact on the business, we just don’t know how bad.”
No one does. In a Feb. 18 news release, the High Point Market Authority said it is prepared to take strong steps if necessary to protect health during the trade show April 25-29. Those include exterior screening before allowing market attendees to access the market’s medical unit. The authority also can utilize an emergency information system to contact guests who opt to receive text-message alerts.
U.S. tries to keep supply chains moving
While U.S. authorities stop foreign nationals who have visited China in the past 14 days from entering the United States, the government is trying to keep supply chains moving, officials say. Air and sea cargo crews from China, if they aren’t showing symptoms, are allowed to load and offload cargoes. It is not believed that the coronavirus is spread through contact with furniture or other objects.
Fortunately, U.S. travel restrictions and other measures have contained the spread of the virus in the U.S. But its continued spread in China will have a growing impact on the furniture industry and international events.
“Ultimately, if this continues for an extended period of time, it may accomplish much more quickly what the tariffs intended to do, and force retailers into moving their sourcing to other countries, even the United States,” Capó told Fortune.
Problems within China are severe
The problems within China come in all forms. For example, Laufer Group International noted trouble moving goods by road:
“Trucking shortage will be major problem until at least the end of February due to transportation restriction and driver shortages,”the logistics service firm reported. “Drivers arriving from rural areas need mandatory 14 day quarantine period which will limit factory production as drivers can’t freely move between provinces. Shippers are reporting product is ready for transport however due to labor shortage on drivers the freight can’t be delivered to consolidation warehouses or ports.”
The HFA will continue to monitor developments and report to our members.