March 11, 2020

The unpredictable spread of COVID-19 has caused delays across supply chains globally. The impact on packaging for Lumi members so far has been localized in China.

As of this writing, all of the factories in the Lumi network are operational, however some factories in China are experiencing 1-3 week delays as they catch up to the backlog from Lunar New Year and the coronavirus closures.

We surveyed 24 manufacturers in the Lumi network including 12 in the US and 12 in China, between March 5th and 9th 2020, to gather information about how exactly your packaging supply chain is being impacted. Find more details in our webinar recorded earlier today.

China manufacturing

Manufacturers in China are taking greater precautions than in the United States. These include all employees wearing face masks, adding more wash stations, cleaning surfaces more frequently, and monitoring body temperature.

Some manufacturers are reporting 5-10% personnel shortages due to quarantine measures, but have stated that this has not affected production capacity.

  • 100% of factories have reopened factories since Feb 17
  • 22% reported 5-10% cost increases for raw materials, especially paper
  • 75% reported lead times extended by 1-3 weeks as they catch up with backed up orders from factory shut downs and manage material shortages.

China logistics

Air freight costs from China are still high — up to $1/KG increase from end of February to first week of March.

Some of the biggest delays may come from lack of air space, due to flight cancellations. There's also an increase of expedited orders being air freighted out of China to account for delays. This all results in a major cut in cargo space. Order early to avoid air freight and mitigate costs.

US manufacturing

All US manufacturers in the Lumi network are operating at full capacity. Prevention among US manufacturers is less strict right now. Only hand washing and safety training were consistently reported.

With the rapidly increasing number of cases, the biggest risk reported by US manufacturers is a personnel shortage.

  • 100% of factories reported that they're open and operating.
  • 100% of factories reported using US raw material sources, and therefore they're not dealing with any material delays.
  • No factories reported quarantined personnel at this time.
  • No factories reported increased lead times or cost.