A cell phone video shows a nearly empty factory in Xiamen, a cavernous room with tables filled with product, workstations idle, only a smattering of workers to be found. Although the region in southeastern China is over 7,000 miles away from Long Island, those empty workfloors are having a direct affect on businesses locally.
“Yes. That’s my product sitting there on those tables,” said Andrew Hazen, owner of Kollectico, described on his LinkedIn profile as one of the largest bobblehead manufacturers. (Editor’s Note: Hazen is also the owner of this publication.)
Hazen shared videos of the empty factory where his bobbleheads sit instead of where they should be - shipping to the United States.
“Big sports brands are probably going to cancel orders,” he lamented.
Kollectico licenses bobble heads for major sports teams, including the NHL.
Delays, idle production, travel restrictions and an abundance of caution stemming from the coronavirus outbreak have disrupted Long Island companies’ ability to conduct business as usual.
Hazen has worked with this specific factory in Xiamen, China for years. He knows the woman who runs the factory. He’s travelled with his family to China and spent time with her. They are close work associates, friends even. The factory manager can be seen in another video wearing a mask, showing what it’s like there: everyone wearing surgical masks in grocery stores, orange tarps hanging as workers mill about in masks.
“I don’t know how it’s going to go if it continues like this,” said Lisa Chalker, owner of a Massapequa-based marketing promotions company called Family Affair Distributing.
Chalker makes branded items from pens to stress balls and her products are almost 90% made in China.
She says that right now it isn’t devastating for her business but she’s already seeing telltale signs. Suppliers are warning her to call before ordering to make sure they can ship products. Some entire factories are under quarantine.
“It’s a very stressful time,” she said because she doesn’t know if a product will be available to order for clients who want them.
If the company has inventory domestically and imprinting is done here in the United States it wouldn’t be a problem but most are not. It’s just the nature of her specific business. Products are cheaper and easier to make overseas.
“I am narrowing my choices,” she confessed.
Joe Camberato, President of National Business Capital and Services, said that it's not just Chalker’s business that is feeling the crunch.
"Many Long Island manufacturers and retailers utilize inexpensive Chinese components and products,” Camberato said in an email to LongIsland.com. “We’ve started to see the coronavirus economic impact from the Chinese manufacturing halt trickle down here, causing Long Island businesses to either postpone deadlines, purchase more expensive domestic parts, or miss out on new business altogether.”
Chalker said that right now she’s investing a lot of time scrambling to find alternative products from other countries like India and Vietnam, which is affecting her bottom line.
“It’s keeping me from going after certain jobs,” she said.
Production line at a factory in Xiamen, China. Photo: Andrew Hazen.
An additional problem is that even when production ramps back up again, the time to make and ship items will still be about three to four months until products come to market, according to estimates by the Long Island Import Export Association (LIIEA). Another worry is that once factories do open up they will not be at full capacity and they might not have all the raw materials they need.
Patti Stoff, Managing director of the LIIEA said that her members have already seen a 25% reduction in ocean shipping containers coming into the country.
“We are very seriously impacted as far as the supply chain,” she said. “Most people don’t understand.”
That means the effect is not just on individual business owners but all the workers who support those businesses. That includes truckers, shippers, and laborers who load and unload products.
“I am thinking forget about Q1 and Q2 we’ll be lucky if we get back on our feet in Q3 and Q4,” Stoff said.
The LIIEA is hosting a conference in Woodbury on Thursday, March 5th to address the issue, titled “Global Forecast 2020: Impact of COVID-19” where they will talk about how the coronavirus is impacting logistics and the supply chain.
It’s not just companies that depend on imports from China that are being affected. Travel bans and a hesitation to travel are affecting other types of companies as well.
Dana Persico is the owner of Long Island Nail Skin & Hair Institute, a cosmetology school based in Levittown. She said one of her premier annual events had to be cancelled because of the virus.
Founded in 1995, the institute educates and certifies thousands of beauty professionals in New York. One of their annual seminars is focused on educating students on permanent makeup called micropigmentation, which Persico likened to cosmetic tattooing.
Every year the school brings in top professionals from Korea and China to perform demonstrations and present some of the cutting edge equipment in the industry that is for sale.
“We work very closely with them designing a program once a year where we invite current students and graduates to see demos, interact and work and get feedback,” she said.
Last week, Persico cancelled the April event, even ahead of an official travel ban.
“I was being very cautious,” she said. “I was speaking with our partners in that part of Asia and they agreed.”
In addition to lost experience by students and product sales, travel and other expenses had to be absorbed.
“It’s an outstanding experience for students and staff,” she added. “Everyone loses out on a lot.”
Asian American business owners are also losing out. Reports say that people have avoided eating at Chinese food restaurants and owners have complained that they’re seeing a 40-70% drop in business.
At Dale Carnegie Training of Long Island in Hauppauge, Managing Director Michael Frenda said that their Chinese franchises have had to shut down physical locations. Instead they are only offering online classes, which for a company that is training people to be better networkers is not as effective as real life courses.
The result is a loss in revenue. Franchisees in China pay fees to the corporate office that Frenda said is based in Melville.
For now, the Hauppauge-based school isn’t affected.
“I’m certainly hoping we’re not going to have that problem here,” he said.
The China–United States trade war might have had an unexpected consequence on Long Island’s warehouses. As tariffs were rolling out, some businesses thought ahead.
“A lot imported as much as they could before so some companies are in a better position than others,” said the LIIEA’s Stoff.
And while people can live with last year’s clothing styles if new fashions can’t be imported this spring, other supplies are literally a matter of life and death.
“Medical supplies, pharmaceuticals, food, they’re just not coming in,” said Stoff.
She said LIIEA members are reporting that those products are not being shipped at all.
“We’re very concerned,” Stoff added.
Chalker - owner of the imprint marketing company - said that while she tries to locate USA-made product alternatives, it’s very hard to find them.
“It might be impossible to find certain items sourced domestically,” she said. “I would rather work with US companies but China is outpricing us.”
She’s keeping a positive attitude.
“Right now I'm just treading water,” she said. “This is bad but I’m hoping for the best.”
