Impact of Corona Virus on Packaging Industry
The coronavirus has already killed more than 65,000 people worldwide. Although the majority of cases were originally concentrated in the Chinese city of Wuhan, the virus left the country and has spread to 204 countries, including the United States. Specifically, the virus continues exponentially with its expansion outside China, with major foci in Italy, the United States, Spain, and Germany. In the United States, the sum of those infected is over 200,000, and for the moment it seems that the state of alarm will last until late May.
But how is the coronavirus affecting the economy? The restrictions and worldwide lockdown have put adverse effects on all kinds of businesses including the packaging. These restrictions will have an inevitable impact on the packaging industry. Although the governments of various countries have already announced extraordinary measures to try to contain the impacts on the businesses. But, sooner or later the packaging companies are going to suffer.
This is due to the deteriorating impact on the expected cash flow for the coming months. Due to the lockdown in the majority of the countries, many retail businesses have also shut down on a temporary basis. This has lessened the demand for various commodities. Due to the complete closedown of various businesses, there are no sales at all which has an indirect impact on the packaging industry. Lessor no sales means that there will be no demand for the boxes and another kind of packaging. This has drastically impacted the packaging companies such as closure of the customer service department and the manufacturing units.
Problem Faced by Packaging Companies
Packaging business is based upon shipping. The packaging boxes are shipped to clients via airlines. But the global pandemic has resulted in the shutdown of major airlines of the word which has adversely affected the flight operation. In this way, even if a packaging company is located in an unaffected area, it cannot ship the boxes to the clients without the flight operation been restituted. Consequently, the packaging companies have to put a full-stop to the business operations until the situations get better.
Moreover, the orders been already dispatched to the customers have also influenced. There are problems regarding logistics due to the complete lockdown in some countries. The employees working remotely cannot have facilities such as a telephone system or a good internet service. In this way, the clients are facing difficulty in tracking their dispatched orders and taking follow backs. Many of the purchasers have canceled their orders and started demanding the reimbursements from the respective packaging company. This has greatly burdened packaging companies.
Regarding the Business Operations
Packaging companies have faced a decline in the number of orders, as well as a reduction in earnings due to the reduction of their operations due to lack of personnel and the global fall of the markets. Unlike big companies, many packaging businesses that don’t have enough revenues might be facing a serious risk of survival in the coming weeks. Contrary to that the companies possessing enough revenues to continue with the business operations including the wages and bills have addressed the problem differently. They have taken practical actions by providing face masks and hand sanitizer in the workplace and providing greater flexibility to work remotely in the most affected locations.
Possible Solutions for Packaging Companies
Now is a time to look inside the company's operations. Improving processes, avoiding waste, not spending money on what is not necessary. Due to the uncertainties that permeate the current scenario, it is recommended that the entrepreneurs should not make any new expenses unless it is something urgent. Sales-oriented packaging companies, in turn, can begin to revise goals for the next quarter.
Due to the unusual incubation period, which can last up to two weeks, another common practice is the imposition of quarantine periods, companies should survey force their employees to stay home when they return from a country affected, both by business and personal travel. In these cases, most employees continue to work remotely from their homes and receive their full salary. However, cases have been detected where the quarantine detracts from the vacation period. After the quarantine period is complete, all the employees must be tested medically for their evaluation regarding the COVID-19.
How Packaging Companies Can Sustain?
While many of the major businesses are running out of revenues, packaging companies still can sustain in difficult times. This is due to the fact that many retail businesses such as bakery, medicine, and grocery are allowed to operate in many countries. This is because the governments have to ensure the food supply. No country can afford the full-fledge stoppage of these businesses. So, packaging companies can target such businesses and get clients. It will be highly advantageous if only the local businesses are targeted as it will be easy to manage the orders and ship the boxes in the local community.