The world’s supply chains are facing a root-to-branch shutdown unlike any seen in modern peacetime as efforts to contain the coronavirus outbreak hit everything from copper mines in Peru to ball bearing makers in Germany’s industrial heartland.

In the last few days, a supply chain crisis that began earlier this year with Chinese factories has spread into key industries elsewhere that had weathered the impact until now. The shutdowns are contributing to the growing conviction that the world has slipped into its first recession since the financial crisis more than a decade ago.

“This is kind of a rolling natural disaster,” said Ethan Harris, head of global economic research at Bank of America. “In terms of the impact on global production, the shutdown outside of China will likely become bigger than the impact from China.”

The shock to supply chains, Harris said, is deeper and more sprawling than the trade wars of the past two years and likely to be more prolonged than the storms, earthquakes or floods that have been a source of stress for major industries in the past. He expects factory shutdowns will last into May and possibly longer.

Compounding the blow for companies, the initial supply shock has become interwoven with a demand crisis in Europe, the U.S. and other major economies as workers and consumers are ordered to stay home.

Bottlenecks

While governments in the region have pledged to safeguard the transport of goods as borders are shut to other nonessential travel, traffic disruptions have started to escalate. Trucks lined up for 40 miles near Berlin after the German border to Poland was closed, and diverting passenger cars to alternatives routes brought little relief.

The car industry is particularly vulnerable to supply chain disruptions. Its fine-tuned logistics are designed to keep storage times to only between 1 and 2 months. The push into electric cars has added to complexity, because production of battery cells requires a steady flow of materials like lithium and cobalt.

Germany’s Schaeffler Group, which employs 87,000 worldwide and is a major supplier to car makers, joined peers on Thursday in hammering out emergency plans to cut capacity in Europe and avoid layoffs. Those include reducing working hours and cutting production on certain days.

“As we have to reduce production in our plants in the light of the crisis, it was important to us that flexible solutions be quickly established,” said Juergen Wechsler, who represents Schaeffler workers for union IG Metall.