A few weeks ago I wrote an entry about the potential challenges to companies that receive shipments from China.  The gist was that the Olympics may impact some shipments into and out of China for a month this summer.   You can find the original entry here: Olympics.  This entry is an update to that original entry.  I’ve received feedback and information from 3 different sources regarding this topic and will try to summarize things here. 

First and foremost, I understand the “official” word from the Chinese government is that they will not comment on potential supply chain impacts until sometime in April.  I’m not sure how to interpret this.  I wonder if there are infrastructure problems.  Perhaps they are scrambling to get extra capabilities so what they announce will sound better than it otherwise would.  Whatever the reason, the lack of transparency at this late date can only cause confusion.  And if companies wait until April to hear from the Chinese government, it will leave them precious little time – perhaps no time – to address potential impacts. This is just not good for business.

Second, I spoke with Jim McGinnis, a businessman experienced in trading with China-based companies.  His take is that companies located near where the Olympics are being held (Beijing) may be impacted because much of the in-country shipping in China relies on government trucking…and many of those trucks in Beijing may be allocated to handle movement of goods for the Olympics.  They may bring in trucks from other urban centers.  If they are able to do that, will those other urban centers then be impacted in their shipping capabilities?  Will the “Olympic effect” spread beyond Beijing?

Finally, Bradley A. Feuling, CEO of Kong and Allan, LLC and an expert in doing business in China, has written a nice piece in IndustryWeek (Changes in Chinese Holidays Impact Your Supply Chain) that describes a similar impact around Chinese holidays.  This piece is focused on the impact of a modified schedule, not specifically lack of shipping capacity.  There is a potential for similar “Olympic effect” end-result consequences of having a holiday period extended or shortened. 

Brad was kind enough to take the time to consider one of my inquiries into the “Olympic effect”, and posted a nice comment in the Supply Chain Management Professionals Forum.  You will need to join the forum to read Brad’s comments.  He provides some advice for companies that expect their supply chain to be disrupted by the Olympics. Brad goes on to indicate that three events could have “major ramifications in material delivery, not to mention end-to-end supply chain profit loss.”  Brad refers to the Chinese holiday schedule mentioned in his IndustryWeek article, the Olympics, and the tremendous snow storms China experienced earlier this year.  My take from the input from Brad, Jim and my other contact is this:  If you were impacted at all by the snow storms, plan for a potential 4 week impact like that from the Olympics, if your suppliers – or their suppliers – are located in the Beijing area.