COVID-19 – WAR OF THE MASKS!

All countries want to protect and ensure their medical equipment supplies – and are even prepared to take drastic measures that will undoubtedly affect the supply chain.

According to a news article published by Radio-Canada, medical equipment is now being sold to the highest bidder. Some shipments have even been diverted. Equipment intended for a particular country never arrives because the plane has been rerouted to another destination.

There are situations where in-transit cargo has completely disappeared or was seized by the in-transit country and redirected to a different destination.

Countries like India and South Korea are now banning the export of medical equipment while others are said to be in the process of doing so. Even though Quebec seems to be confident of having enough equipment for the next few weeks, Canada fears that supplies will be insufficient.

Given the current state of affairs, the whole logistic chain is affected by the pandemic. For several days now, air transport has been disrupted and the situation is changing daily. While ground transport still works relatively well, delays may arise from frequent inspections by highway authorities and the United States Department of Transportation (USDOT). This ensures that the goods in circulation are for essential services and helps implement tighter controls on – or even prohibit – the export of medical equipment.

Companies wishing to import masks in large quantities must protect themselves since it costs millions of dollars to buy masks (mainly made in China) and reserve planes. And once a plane is booked, there is no refund possible. To make such a purchase you must be able to pay!

Once widely used and now less popular, letters of credit are a possible solution. A letter of credit is issued by your banking institution, which will freeze the funds and not release them to the seller until the goods have arrived at their destination and/or the documents needed to take possession of the cargo have been delivered to the buyer. Both parties are thus protected.

We are living in unprecedented times. Our ways of doing business must be reviewed every day – and even revisited several times in the same day.

W2C tries to stay on top of what’s happening in the world of logistics and customs brokerage. Should you require assistance, please don’t hesitate to contact one of our advisors.