COVID-19 epidemic highlights supply chain problems in China's agricultural industry

Many Chinese fruit and vegetable companies faced serious challenges during the period after Chinese Spring Festival [25 January, 2020] because of the COVID-19 epidemic. On the one hand, fruit and vegetable companies had difficulty finding suitable transport for deliveries because many truck drivers were stuck at home as a result of quarantine measures. On the other hand, many companies lacked support systems and were unable to properly predict the volume of orders for agricultural products.

Manager Wang of Jing Lian Tong Supply Chain Management Cloud, a company specialized in supply chain services for agricultural products, recently provided his insights into some of the larger issues in the agricultural supply chain.

"Around 90% of the small and medium companies in China's agricultural industry use vans for distribution. These vans do not support temperature control or track and trace systems. In particular during this COVID-19 epidemic, when traffic problems can severely delay the journey, many agricultural product spoil during the journey. Clients who receive agricultural products whose products quality declined because of traffic delays, often refuse to accept such deliveries."

"Furthermore, when truck drivers hurriedly offload their cargo, many suppliers find that they lack the space to store the products. More recently, because distribution has become problematic, many fruit and vegetable suppliers have withdrawn from retail. They have returned to old-fashioned wholesale trade instead," explained manager Wang.

"The number of clients who use our storage services has rapidly increased. We provide this service to help clients find the nearest, most-suitable storage facility in the shortest amount of time. This is a great relief for clients who otherwise have no option but to refuse products because they lack storage space."

"In addition, market demand is sometimes high and then suddenly low because of the insecurity during this epidemic. Many traders have no way to accurately predict the number of orders they will receive, which means they are not able to quickly respond to changes in the market. In order to solve this problem, many clients seek our help. They request to use our SaaS information system. This system helps clients to make estimates with regard to distribution channels and the volume of purchase orders. After fruit and vegetable companies begin to use this system, then clients, suppliers, and buyers will all have a clearer understanding of the direction and volume of product flows. This will help to reduce instability in the relationship between supply and demand in the Chinese fruit and vegetable market during the epidemic."

The outbreak of the corona virus also highlighted another problem with the agricultural supply chain, in addition to the aforementioned problems with distribution and the relationship between supply and demand.

"More than 70% of the small- and medium-scale companies and restaurants are either collectively buying their supplies or going through wholesale markets. Another 20% of the companies connect with cooperations to secure their supplies. Distant clients in particular have no guarantee for the product quality of their orders. They will often find upon delivery that the overall product quality of their collective purchase is below standard. We have recently helped clients make direct purchases from production areas. We arrange distribution and keep an eye on product quality for our clients. Furthermore, the reduction of intermediaries helps our clients to minimize risks and keep the cost price low."

"The importance of agricultural supply chains has become obvious during the COVID-19 epidemic. We believe that agricultural companies will pay more and more attention to their supply chain in the future. We have also seen that a growing number of companies are beginning to use the SaaS order service," said manager Wang.

For more information:

Wang Yin

Jing Lian Tong Supply Chain Management Cloud

Tel.: +86 13811342876 

E-mail: Terry.wang@e-jlt.com 


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