Coronavirus has led to more than 50,000 cases where enterprise supply chains are at risk, according to a risk management company.
Riskmethods said over 46,000 of these cases related to suppliers in China, but the number of suppliers at risk in Italy and other European counties has grown dramatically in March.
Riskmethods said there had been a 44% increase in companies declaring “force majeure”, when they are legally unable to fulfil a contractual obligation due to forces outside their control, and a 38% increase in production stops/reductions in operating hours.
“When suppliers can’t fulfil contracts, it has a trickle down affect across the supply chain,” said Riskmethods.
“As this crisis persists, expect to see a spike in financial risks relating to the viability of suppliers and manufacturers.”
Riskmethods said its platform showed coronavirus-related risks rocketed globally from 27,086 in February to 164,531 so far in March, driven by large increases in countries including the US, Germany, France and Italy.
The company said 81% of manufacturing firms were experiencing supply problems due to the virus, in line with an SM poll that showed a similar picture.
“With the epidemic turning into an official pandemic in March, we are seeing a huge spike in countries around the globe due to governments and businesses taking respective measures, such as travel bans, border controls and closings – led by the largest export nations,” said Riskmethods.
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