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PCB007-Apr2020

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26 PCB007 MAGAZINE I APRIL 2020 Matties: And if that's any indication what's happening in Asia, it's kind of a model time- line for us to consider here in North America and other parts of the world. DuBravac: I think that's fair. I think it looks like North America and Europe, to some extent, are four to six weeks behind Asia, with respect to closures and other impacts from the spread of this virus. And so I would expect that Europe and North America would follow that similar timeline. And again, it's never perfect. There are lots of dynamic situations that are continuing to develop and will develop over those six weeks. For example, in February, about 8% of contain- er shipment capacity was unutilized essentially, was offline. That's all coming back online this month and making the major container ship- ping companies anticipate being at full capacity in March, by the end of March. But that period in February where they weren't at full capacity creates issues. You have the buildup of empty container cargo containers that end up building up outside of the port, or they're left on train cars and on side rails and other things like that. And so the transportation network starts to get inhibited to some degree. About half of their freight is carried by passenger flight. So as passenger flights have been canceled out, that has taken a lot of air freight offline. And so companies have had to find other freight options and other things that they could do in place of that now. We are starting to see Amer- ican Airlines, Delta, and others announce that they'll be running cargo-only flights. So that should help some of the air freight situation that we've seen over the last couple of weeks. But those are all the things that companies will have to be dealing with probably at least for the next two or three months. Matties: Overall, you've mentioned supply chains and shipping and all sorts of aspects around that. What do you think the long-term impact will be? What lessons have we learned? DuBravac: Well, I think every time we have an event like this, it tests the resiliency of the sup- ply chain. And so in many ways, this is what the supply chain is designed to do, is to re- spond to shocks somewhere in the system, and to make adjustments in the supply chain with- in that system so that consumers and business- es that are at the far end of that don't feel that. And I would argue that the supply chains have done a pretty good job, at least from what I can tell, thus far, at doing that. We had a ma- jor supply disruption when you had trying to go offline—essentially, the entire country go offline—from a consumption and a produc- tion standpoint for several weeks. And yet you didn't see a lot of electronics manufacturers in Europe or North America also go offline as a result of not being able to secure the right in- puts and components and supplies that they needed to continue to produce. So they were able to adjust to those shocks. Now, obviously, that's probably not true in all cas- es, in absolute cases, but the large number of com- panies that I spoke with were able to adjust to the shock that they saw and make other arrangements and look for alternative sourcing and alternative pro- ductions. And you haven't seen consumers talking about, or businesses talking about the inability to get certain products. Definitely, you have seen certain orders delayed as it relates to consumer electron- ics. I know that for certain, and primarily it's in the consumer electronic space, smartphones and lap- top configurations were impacted, but by and large, you haven't seen entire classes of categories impacted. Matties: Very good. To close, Shawn, what sort of advice would you offer the industry at this point? DuBravac: Well, I think the advice I would of- fer is to remain resilient. Manufacturers should continue to stay online. Obviously, following all of the direction that we're being given by the CDC here in North America and other similar agencies more broadly. Look to make adjust- ments within your manufacturing processes if you can, in order to abide by these guidelines. But continue to be resilient. I've been very im- pressed with the companies that I've spoken with and the resiliency that they've shown to address the issues that they're confronted with and to make adjustments. And so continue to

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