Coronavirus outbreak could cause severe delays to shipping into Israel

While shipping from China has been hit the hardest, limiting or banning flights from the US could result in "real chaos."

Amazon packages awaiting dispatch (photo credit: PASCAL ROSSIGNOL/REUTERS)
Amazon packages awaiting dispatch
Online shopping and shipping in Israel could suffer a heavy blow due to the coronavirus outbreak, with shipping delays projected to last for months, Haaretz reported.
The main causes of this slowdown are due to the suspension of flights into Israel from Europe and the US, causing delays in orders from overseas through services such as eBay and Amazon. With flights from China and Hong Kong having already been suspended, similar delays are expected through e-commerce platforms like Ali Express. Products will eventually be out of stock, with companies unable to make any deliveries whatsoever.
Israelis tend to be big fans of online shopping, as buying products overseas tends to be much cheaper due to overall lower prices and exemptions from VAT and customs. However, around 90% of these deliveries are brought into the country through commercial airline flights rather than cargo planes, which are less likely to be canceled.
“The minute they stopped flights from China and Hong Kong, the entire shipment industry sustained a heavy blow,” courier company DHL Express marketing and sales representative Yonatan Ivgi told Haaretz. “Whoever could, did more shipping by cargo plane.
“Stopping incoming passenger flights to Israel has been very challenging for the logistics sector and, as a result, for the Israeli economy. When they stop, the bandwidth for imports and exports is hurt badly.”
Cargo flights have since been the means of online sellers to deal with the lack of passenger flights. DHL operates two cargo planes for Israel, and their activity has only increased in recent months because of pressure to reduce shipping times.
Other companies who lack cargo planes are often helped by others, one anonymous source told Haaretz, adding that companies in countries on the current ban list are able to circumvent the ban due to the planes.
“The pilots simply don’t leave the cockpit and aren’t admitted into the country they have flown to, so the regulations don’t apply to them and they can continue to fly between countries,” the source explained.
Another solution that many companies are trying to use is connecting flights – flying the goods from China to Israel via a third country – but the Health Ministry's ever-increasing ban list has made this more and more complicated.
To illustrate the damage done so far, data from Israeli credit card company Max revealed that February sales from Ali Express were down 73% compared to a year earlier, Haaretz reported.
However, other companies have benefited. Amazon's sales went up by 63%, and while this could be attributed to its free shipping to Israel for purchases of $49 or more, other sites such as British retailers Asos and Next increased as well, by 7% and 21% respectively.
Former eBay Israel business manager and current e-commerce consultant Elad Goldenberg told Haaretz that he thinks online sellers will soon find a way to adjust.
“The logistics world knows how to adapt: If there aren’t any flights but there’s room on a cargo ship, so they will send it that way. But that means that delivery times will take longer,” he said.
While the main impact so far has been online sellers from China, the biggest worry is that the government will start limiting flights from the US, if not completely ban them altogether. One industry source told Haaretz that if the government does this – which it is reported to be considering – then the result will be nothing short of "real chaos."
“It’s enough that the US issues a lockdown order and warehouse workers can’t get to their jobs. Deliveries can’t get out of the warehouse in the affected area. The same applies to delivery people,” an anonymous courier company manager told Haaretz.
“So somehow, packages do get on a plane, but how to fly to the destination still needs a solution. Then, when it gets to Israel, delivery now depends on local quarantine orders. If the lockdown here grows more severe, who will release the package from customs?”
The coronavirus outbreak started in Wuhan, China, and has since spread to countries all over the world, infecting over 110,000 people. Because it is so contagious, many countries have been issuing quarantine orders and implementing measures to restrict movement in order to stop the spread.