Navigating the COVID-19/Coronavirus Outbreak
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Dear SOCMA Members,
As the impact of COVID-19 continues to spread in the United States and throughout the world, we empathize with those who have been directly affected by this pandemic. We also understand there may be significant impacts to your businesses on the horizon, which commands the need for sound intelligence and insight to help you mitigate business continuity challenges.
SOCMA is continuously in contact with federal officials and is your trusted source for information regarding the effect of COVID-19 on the specialty chemical industry.
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SOCMA has developed a
COVID-19 resource page
that includes real-time, vital information and downloadable guidance documents to assist you in navigating your company’s COVID-19 response plans.
We urge you to review and share these COVID-19 resources with your team and contact SOCMA if you have any tools and templates, such as pandemic plans, customer notifications/letters, event statuses and other pertinent information, to include on the resource page. These will be populated on our website as we receive them.
Below you will find updates on what SOCMA has learned about the impact of COVID-19 on industry supply chains and operations, as well as recommendations to aid in your decision-making. As part of these efforts, we're encouraging members to
complete a questionnaire
, which we will aggregate to share all responses in a future member communication.
Please reach out to me, or our staff with any company specific needs.
Regards,
Jennifer Abril
President & CEO
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- Production in China is still operating at less than full capacity but has been increasing day-by-day since facilities and industrial parks have largely reopened.
- Southern China – areas such as Jiangsu, Zhejiang, Guangdong, etc. (except Hubei province) – is resuming operations faster than Northern China (areas such as Hebei, Tianjin, etc.). Northern China is facing challenges due to public transportation issues and quarantines.
- Logistics is by far the most disruptive issue reported.
- Air freight is said to be nearly non-existent, and, where it does exist, fees are as high as 8X the normal costs.
- Land transportation in China is experiencing significant delays, which has a domino effect on all exports to the U.S.
- There are significant shipping challenges because freighters are being quarantined for additional time, or because containers are unavailable. Further, on the shipping front, many members have had shipments delayed with promises of delivery in March or April, but there are no guarantees those dates will see delivery either.
- Some members have suggested that, due to 301 China Tariffs, they were more prepared because they were already working on diversifying suppliers and had stockpiled some of their raw materials.
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- Most member companies have suspended non-essential domestic and international travel.
- Site/facility access is an increasing concern. When possible, companies are delaying visits with customers, auditors, inspectors, etc., until the emergency is resolved. Additionally, some companies are increasing screenings for visitors.
- Some members are taking steps to increase the frequency of facility sanitation above and beyond standard health practices.
- Companies are reviewing pandemic plans, evaluating sick leave requests, and updating telework policies. At least one member is thinking about rotating staff to reduce population density at the office.
- Members should review the “force majeure” clauses in both purchase and sales contracts. Many contracts include broad provisions and “acts of god” clauses that may apply in this situation. This could negate/suspend performance of the entire contract, or a portion of the contract, which both purchasers and sellers will need to understand.
- Members are also planning return-to-work protocols and using screening tools while being mindful of the Americans with Disabilities Act, Family Medical Leave Act, Title VII and other anti-discrimination laws.
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Government Activities/Requests for Information
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- Look to your state and local governments for real-time guidance concerning bans on large events, business closures, access to ports and shipping routes, issuance of states of emergency, travel restrictions and other crucial information. While we should monitor alerts from the Centers for Disease Control (CDC), and other federal agencies, members must also coordinate locally as legal directives are more likely to come from state, county or local officials.
- SOCMA was contacted by the Department of Commerce and the Food and Drug Administration for information on the availability of raw materials and anticipated production slowdowns for the specialty chemical supply chain.
- Members are asked to keep SOCMA apprised about what you are experiencing, approaches taken to mitigate impacts on your operations, and other relevant information that can be disseminate to federal, state, and local governments. The information SOCMA previously provided was used to inform Congress on emergency appropriations to combat the coronavirus, which has resulted in the availability of loans to small businesses.
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There are several industry events in the coming weeks and months that have been postponed or canceled, or that have undecided statuses.
Out of an abundance of caution, SOCMA has cancelled the 2020 SOCMA Policy Summit, and our staff has suspended travel outside of the Greater Washington Metro area.
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