Business travel is slowing at many Vermont companies as managers watch for signs of how the COVID-19 virus will affect the United States.
Burton Snowboards has cut off business travel to China, Iran, South Korea, and Italy until further notice. Cox Automotive, the parent company of Burlington-based Dealer.com, is limiting non-essential employee travel. Heady Vermont, the cannabis industry interest group, is monitoring a wave of conference cancellations in the cannabis industry.
It’s a good idea to prepare for staying put, said Tom Torti, president of the Lake Champlain Chamber of Commerce. Torti said he’s heard from several Chamber members in the travel industry wondering what impact the spread of the virus will have on the summer tourist season.
“The answer to that is it’s really too early to know,” said Torti. “We’re not hearing about mass cancellations, but to anyone who has a large event coming up between now and call it June, I think it is prudent to begin thinking about what you would do if you needed to cancel something like that.”
Vermont has a diverse economy. Some of its businesses are directly tied to shipments from badly affected countries like China; others are exceedingly local. Tim Piper, the president of the Vermont Inn and Bed and Breakfast Association, said he hoped a reluctance to travel by air would translate into a new enthusiasm for traveling by car, rerouting New Yorkers who had planned to spend spring break in Colorado to Vermont instead.
So far, there’s no sign of that happening. But the travel restrictions are having an impact on individual companies.
The crisis that COVID-19 has set off in the cruise ship industry is reaching inland to Middlebury, where Danforth Pewter expects to see sales plummet at its stores in Portland, Maine; Portsmouth, New Hampshire; and Mystic, Connecticut, all ports of call for passenger ships.
“If the cruise ships stop going, which they probably will, we’ll see a big decline in foot traffic,” said Danforth CEO Bram Kleppner.
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Northeast Processing, a cannabis company in Brattleboro, is seeing a shortage of the bottles it buys from an American supplier. CEO Carl Christianson added that a customer who placed a large order in Khazakstan for tinctures and salves is marooned in Switzerland by disease-related travel restrictions.
A.N. Deringer, the largest privately owned customs broker in the U.S., predicts that the supply chain disruption will affect global trade for months, especially in the shipping industry. The broker, which is based in St. Albans, published a blog by Chris Brennan March 3 about the impact of the virus that said the supply chain problems will soon affect consumers.
“It’s not far off to imagine empty shelves at a U.S. Home Depot, for example, because companies cannot produce or deliver the goods,” said Brennan. “This outbreak could also lead to consumers paying more for delivered goods. Increased shipping competition leads to higher shipping costs, and companies will pass these charges on to consumers.”
The good news: The outbreak could have hit at a worse time. Because it happened during the annual market slowdown that occurs after Christmas, the effects won’t last as long, Brennan said.
“The impact would be far worse if the virus hit before students returned to school in the fall or right before the holiday season,” he wrote. “The impact of an outbreak during a peak season would be catastrophic. Companies tie their profits to these peak seasons, and if they cannot restock their shelves, it hurts their bottom line.”
There’s also good news for FulFlex, a Brattleboro elastic manufacturer that makes the straps for medical masks. Orders there rose by 15% to 20% in February, and company manager Don Venice said he expects to see them rise by another 10% to 15% in March. Venice, who hastened to add that he’s not happy about the conditions that have led to the increase in orders, thinks he’ll probably have to cancel a trip to see the company owners in Pune, India, in April. He’s been traveling there about three times a year since 2005. Increasing the capacity of the factory occupies his thoughts these days.
“We’re proud of the work that we’re doing as we make different strategic decisions on how we can grow with all the obstacles that come with growth,” said Venice. “Because we’re not in an area where there are hundreds of people looking for work.”
Keeping the existing workforce healthy is on the minds of many Vermont employers, a lot of whom are following advice from the Agency of Commerce and Community Development to regularly sanitize commonly touched surfaces in the office. At Danforth Pewter, the Lake Champlain Chamber, and the real estate developer O’Brien Brothers, staff have created rosters.
“We have a schedule; each employee is assigned a shift” for a deep supplemental cleaning and disinfecting of common areas, the kitchenette, printers, doorknobs, bannisters and other high-touch areas, said O’Brien’s CEO, Evan Langfeldt. “Mine is Thursday afternoon.”
Christianson said he worried about illness among staff because, like many manufacturers, he runs a business that requires people to report to work.
“Honestly, we’re a startup with 12 people, and if the coronavirus hits and we get quarantined for 14 days, that’s a difficult proposition for a business to stay afloat,” he said. “That’s honestly the thing that keeps me stressed. If a member of my team or my team as a whole has to be quarantined, I don’t know as a small business how you survive.”
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