Impact of Restrained Logistics Network on Rubber Tire Market

SCI99

2020-02-28

导读：Impact of Restrained Logistics Network on Rubber Tire

Impact of Restrained Logistics Network on Rubber Tire Market

Logistics networks play an important role in the procurement, production and sale of goods. After the outbreak of China’s public health emergency, how does the restrained logistics networks affect the rubber industry and enterprises’ production? Are the logistics networks recovering across China? SCI has investigated 112 enterprises to give you an insight.

About the samples:

Most of involved enterprises in SCI’s investigation are the manufacturing and trade enterprises. To be specific, the manufacturing enterprises accounts for 43% of the total, the trade enterprises 56%, and the enterprises of other kinds 1%.

Chart 1 Regions of Involved Enterprises

59.02% of those enterprises are based in East China, 19.67% in North China, 13.93% in Southwest China, Hunan and Northeast China, 7.38% in South China.

Other enterprises are based in Heilongjiang, Jilin, Liaoning, Yunnan and Hunan.

Chart 2 Wether Restrained Logistics Affected Enterprises

77% of the enterprises under investigation are affected significantly, while 23% of them are only under minor influence. Overall, the rubber production chain has the least influence from the logistics networks, because most feedstock comes from themselves or is transported through pipelines, while the finished goods are stored at warehouses or outdoors. However, sales are severely affected. The re-opening of downstream factories has been postponed. Few goods are delivered. The trading atmosphere is tepid.

Chart 3 Influence of Restrained Logistics Networks on Enterprises

The restrained logistics networks can lead to overstocked finished goods, especially at synthetic rubber manufacturing factories, which accounts for 46.51% of the negative influence. Firstly, after the holiday, production is recovering slowly in downstream industries. The transportation services are cut down or restrained. Finished goods are overstocked. To relieve the inventory pressure, most enterprises choose to reduce the operating rate. Secondly, the costs are raised, which accounts for 17.83% of the negative influence. The circulating of goods slows down, costs of storage go up. Thirdly, the tight supply of feedstock accounts for 11.63% of the negative influence. Due to the restrained logistics networks, some downstream enterprises find it hard to procure feedstock, and they choose to consume feedstock from their own warehouses.

There are three reasons leading to the restrained logistics networks. Firstly, the governments implement traffic control, which restrains the transportation of non-essential goods. This explains 55.17% of the influence on the logistics networks. Secondly, when situations get serious or worrying, some regional governments choose to block paths to some warehouses or downstream factories, which explains 18.97%. Thirdly, there is a shortage of drivers. Nonlocal divers, returning to their work place from Chinese Lunar New Year, will be put into quarantine for two weeks before they can work again. Besides, for the sake of safety, some drivers refuse long-range or even short-range transportation, which explains 16.09%.

Chart 4 Reasons behind Restrained Logistics Networks

Chart 5 Recovery of Logistics Network This Week

Overall, the restrained logistics networks can severely affect all industries. However, as the traffic control is relaxed in some regions and the re-opening of businesses and factories quickens, the production is resuming and recovering slowly in regions which haven’t been hit severely by the public health emergency. It’s predicted that the situation will get better next week.

.......

Please click "Read more" for more information