Event description
The current round of epidemic continued to ferment, and the freight volume of highway vehicles fell to the freezing point. The impact of the epidemic extended to the whole country and various industries along the supply chain.
Event review
There are three paths for the epidemic to affect production. In the stage of wide spread of the epidemic in the region, the impact of the epidemic spreads along three paths: 1) personnel isolation will occupy working hours, the average working hours of labor force will be reduced, and labor shortage will reduce the production efficiency of local enterprises; 2) People, vehicles and goods in the circulation field also have the risk of spreading the epidemic. The isolation policy is bound to reduce the turnover efficiency of logistics resources and reduce part of the production capacity of the supply chain; 3) The decline in the efficiency of circulation will affect the accumulation of enterprise inventory, finished products and raw materials inventory, consume the cash flow of the enterprise, and restrict the capacity utilization of the production department. The supply chain is a closed loop composed of multiple links. The fluctuation of any link will spread to other links, and the fluctuation of risk areas will also spread to other regions along the supply chain. After several times and cycles, the turnover efficiency of labor, means of production and cash of the whole society will temporarily decline. In extreme cases, the production link will be shut down.
It covers the supply chain from consumption to manufacturing. In the past two years, the epidemic situation in China has been sporadic, but it has never been completely cleared. The probability is still this situation in the future. The epidemic has caused fluctuations in China's economy. The impact of the past several rounds of epidemic has mainly affected the consumer side, but the impact of this round of epidemic is different from the past, spreading to the supply chain, manufacturing industry, and even all regions and industries. The expansion of the impact scope of this round of epidemic is attributed to the longer impact time. As mentioned earlier, the epidemic has brought about a decline in the efficiency of means of production, and the impact is from "point"
When it comes to "line" and "surface", it is magnified exponentially. The longer the influence time, the greater the influence range. At present, China's epidemic prevention policy has been adjusted according to the "high infectivity" of the mutant strain, and the three zone classified management has been implemented in the epidemic affected areas. A wider range and higher frequency of screening is conducive to the rapid control of the spread of the epidemic. Although we believe that the supply chain will face risks again in the transition to the "normal" stage, the interruption of the supply chain may be difficult to reappear under the decision of "dynamic clearing".
From the point of time, the inflection point of the supply chain has appeared and will usher in a wider range of improvement. The State Council has set up a leading group for ensuring smooth logistics, and has issued a large number of supporting policies and measures. The freight logistics has been in the stage of stable recovery. At this stage, a large number of personnel and vehicles are still isolated. The rapid recovery of the supply chain will come after the social clearance. The new cases outside the control area of Shanghai continue to decline, and the social clearance is just around the corner. The impact of this round of epidemic is universal, almost all regions and industries are affected, and the highway vehicle freight index of all provinces shows a downward trend. The universal impact may need universal support policies to hedge. The epidemic has an impact on both sides of supply and demand. The direction and range of impact in different industries are different. Moreover, after this round of epidemic, we believe that some of the impact will last for a period of time.
On the demand side, both consumer goods and manufacturing industry will usher in the stage of replenishing inventory, which will also catalyze the demand for freight logistics; On the supply side, the epidemic prevention policy will continue to suppress the circulation efficiency of personnel, materials and vehicles, and the production capacity of the supply chain may be limited. We expect to experience a shortage of transportation resources for a period of time, and companies with carrier qualification will be short-term β Larger companies that can provide stable products will show α。 In the epidemic stage, the mode with fewer links in the industrial chain, high degree of vertical integration and relatively closed production and operation environment is less affected by the epidemic. Stable supply chain products are more conducive to obtain customer premium, and the profitability of companies with price elasticity is expected to rise. From the perspective of supply chain stability, recommend the leader of hazardous chemicals logistics Milkyway Chemical Supply Chain Service Co.Ltd(603713) etc., direct express S.F.Holding Co.Ltd(002352) and railway logistics Daqin Railway Co.Ltd(601006) etc; From the perspective of supply chain improvement, recommend the leader of foreign trade centralized transportation Cosco Shipping Holdings Co.Ltd(601919) , domestic trade centralized transportation Shanghai Zhonggu Logistics Co.Ltd(603565) , e-commerce express Yto Express Group Co.Ltd(600233) and Yunda Holding Co.Ltd(002120) , bulk supply chain Xiamen Xiangyu Co.Ltd(600057) and so on; It is suggested to pay attention to air freight, freight forwarders, port terminals and domestic liquefied water transportation companies.
Risk tips
1. Covid-19 virus is out of control; 2. The global economy stalled.
