Strict, Sudden Lockdowns in Chinese Manufacturing Hubs Forcing Promotional Products Order Cancellations for Distributors
The government of Xiamen, a city of 5 million people in the southeast region of China, this week told residents not to leave home except when necessary ahead of a major travel season in China. The city closed parks and sports venues and prohibited large gatherings like tours and performances.
Xiamen is one of four cities in the Fujian province to lock down after reports of COVID cases.
Strict lockdowns in China have already caused supply chain issues ranging from cargo backlogs at ports where workers tested positive to canceled orders at small factories facing cash-flow problems due to backed-up inventory. While these issues have so far indirectly impacted the promo industry, the Xiamen shutdown is having a more immediate effect.
Roberta Lash, senior account executive for Touchstone, a Top 25 distributor, said that one of her promo suppliers was forced to cancel an order for 4,000 silicone bracelets due to the Xiamen lockdown.
“These were due in hands to my client on Oct. 1," Lash told Promo Marketing. "Yesterday I was informed that the Chinese government closed the city of Xiamen due to rampant COVID. My order will not be delivered.”
Lash stressed that this is in no way an indictment of her supplier partner, and that these were situations completely out of their control.
China locked down Xiamen, a city of 4.5 million people in the southeastern province of Fujian, after detecting a dozen coronavirus cases https://t.co/JoGfiLZhdu
— Bloomberg (@business) September 14, 2021
The delays at ports and related pricing and inventory issues in the U.S. are well-reported, but to some promotional products professionals they might feel abstract—things happening far away that impact their business indirectly. Add to that the fact that many of these Chinese city shutdowns aren’t as widely reported, so distributors might not know their orders are in jeopardy until it’s too late.
“So, to add onto all the disruption delays in our industry, I wonder how many people are aware that the Chinese government is shutting down regions where COVID needs to get under control,” Lash said. “And when I say ‘shut down,’ this means no one goes in or out of the city, no UPS, FedEx or any carriers. All business, including factories, are shut down. On top of this, there is a national holiday coming up at the end of the month, which will also shut down the country.”
People are not allowed into residential compounds without approval from the government, and non-essential vehicle traffic in and out of those areas is forbidden, according to Reuters.
China has been aggressive in its efforts to prevent outbreaks. Today, the government shut down parts of Harbin, a city in the country's northeast, after just three positive COVID cases were reported there. So far, that shutdown appears to include only public places like gyms and movie theaters, rather than manufacturing or industrial centers.
Still, the extreme and sudden nature of these lockdowns has the potential to impact all phases of the supply chain, adding to existing delays and product availability issues.