The global coronavirus crisis has made a lasting impact on many aspects of daily and corporate life. For precious metals dealers, handling the logistics of moving physical gold from point A to point B remains incredibly challenging even today.
The Logistics of Moving Gold
When most air travel is still restricted to this very day, and a lot of businesses are not allowed to operate, the logistics side of the spectrum becomes incredibly complex. Valcambi SA, a Swiss refiner of precious metals, has found that out the hard way.
More specifically, the company has been struggling to move a shipment of gold out of Hong Kong. This entire debacle lasted for five straight days. Not just in terms of not being able to get the gold on a plane either. In fact, the shipment was loaded onto a place twice, and offloaded equally as many times during this period.
Surprisingly, the shipment eventually went through without any real problems. When everything was said and done, the bullion arrived safely in Switzerland without any precious warning or indication. That in itself is both interesting and worrisome.
The fact that the gold shipment arrived, is a big victory for the company. However, having it show up unannounced, is rather problematic in its own regard. Handling the logistics of an arriving shipment of bullion is equally as problematic as getting it to leave a country during the coronavirus crisis. It is unclear if other companies suffer from similar issues during these troubling times.
Handling Million-Dollar Shipments Under Coronavirus Guidelines
Although this may have been a stand alone incident, it does raise a lot of questions. The seemingly “careless” approach to a multi-million dollar gold shipment is incredibly problematic. Granted, the coronavirus crisis is not making things easy for anyone.
Under normal circumstances, gold would travel in cargo holds of commercial planes. However, the coronavirus crisis has ensured that commercial flights have decreased significantly all over the world. New solutions need to be found during times like these. Completing shipments without proper communication is not the right approach, however.
The coronavirus crisis is problematic for the gold industry. Delivery of physical bullion usually occurs instantly. That is, under the current set of circumstances, no longer a viable option. It creates issues with logistics for all major gold markets globally, and things may remain that way for quite some time to come.
Contrary to what most people would like to see, shipments of gold and other precious metals are still non-essential. Instead, priority is given to medical supplies, as those are still in very high demand all across the globe.
As the delivery of physical bullion becomes subject to a longer timeframe, the associated costs will rise as well. For some companies, chartering cargo-only aircraft is the only option left on the table.
As most of the precious metals are found in Asia, the current logistics nightmare will not relent. Moving anything out of that continent is problematic, except for medical supplies. The extra costs associated with this process need to be paid in one way or another. It is a very worrisome side effect of the coronavirus crisis, yet the companies worth their salt will ensure it gets taken care of regardless.