Zooming Out: How Coronavirus Impacts the Awards Industry

Between human-interest stories and political debates, the coronavirus has made its stake in all the major media outlets. What started in China is making its way into other countries throughout Asia, Europe, and now North America. As a result of a rising death toll and people being advised to stay home to avoid contracting the virus, factories throughout China are either closed or partially operating.

Just about every market is experiencing repercussions from the coronavirus, including the awards and personalization industry. Several companies told A&E that they were prepared for workers to be off for a chunk of time around the Chinese New Year, but they could not have anticipated this. Weeks of production has been lost, as well as thousands of lives.

Since its outbreak in January, there has been over 82,000 cases worldwide with close to 3,000 deaths caused by the coronavirus (COVID-19), as of February 27th. In the U.S., there has been 60 cases counted so far.

The most common symptoms of the infection include difficulty breathing and fevers. At this time, there is no known treatment or vaccine, and individuals experiencing symptoms are encouraged to seek out medical help.

Factories in China were planning to go back to work the first week of February, but the government told most factories to not open, according to an announcement from Scott Sletten, the president and CEO of JDS Industries.

Sletten explains in his letter that while JDS does not have any factories in the Wuhan area of China, where the coronavirus is spreading most rapidly, it still has an effect on many employees from that area as they cannot come back to work while in lock-down mode.

“It is common in China for a factory to use a combination of local workers as well as others from around the country that live at the factory in apartments,” states Sletten. “At the present time, the local workers are mostly ready to come back to work, but workers from other parts of China might not be able to come back.”

The employees that do travel back to work are subject to quarantine for several days, so many are choosing to not come back at this time. Because of this, the production capacity is substantially reduced at many factories over the next few weeks or months.

Sletten adds that some of its factories seem optimistic about resuming operations in the next couple weeks; however, others do not see production starting up again until March. This will cause delays on nearly anything produced in China and any products not shipped before the Chinese New Year. These delays are only affecting items produced in China; JDS’ factories in Vietnam, Malaysia, and Thailand are all up and running as of now.

“Overall, JDS carries large inventories, so a few lost weeks of production will not cause us to run out of many items,” Sletten says. “We will be working with our vendors closely and monitoring this situation and trying our best to keep up with delays in our computer systems as our vendors update us.”

The situation for Mission Awards is quite similar. Owner Tim Crandall tells A&E that they have had to cancel a lot of orders.

“It’s a devastating situation for us, but even worse for the poor folks that are actually losing their lives over there,” states Crandall. “I think one of the biggest issues is people are still selling and we’re still designing and selling items, and it’s piling up.”

While some plants are back and producing, there’s certain elements that aren’t getting done, such as metal platings, according to Crandall. From what is produced, it’s a whole other element to get the products to the U.S.

“It’s not just our industry that isn’t getting their products,” he explains. “There’s only so many planes that go across every day and there’s so much of a backlog.”

Currently, Crandall says the main focus at Mission Awards is fulfilling customer’s orders in relation to when the orders are needed by. He predicts to be back on track by the end of April or early May.

On the other hand, Derrick Calcote, owner of PDU CAT, says they have not seen as much of an effect from the coronavirus. According to Calcote, PDU CAT brought in all of the product needed for the busy season before the Chinese New Year. Everything is either in stock or on the water at the time of publishing. PDU CAT also has factories in multiple countries.

“We do not anticipate being impacted at all by the issues,” he explains. “Every day we get an update, but things look better every day and we’re seeing production capacity continue to increase.”

While some companies experience a heavier impact from the coronavirus, more people and products may run the chance of being affected.

Editor’s note: This is a developing story. Have you been impacted by the Coronavirus? Contact us here.