12-17-2021
Global supply chain crisis could last another two years,
warn experts.
((not a Biden thing- The worldwide wide global shipping
system is fuked)))
As some bottlenecks ease others are just starting, meaning the post-pandemic economy ‘won’t return
to normal any time soon’.
China’s Ningbo Zhoushan port in Zhejiang province,
a key shipping hub. A new Covid outbreak in the region has raised fears of further delays in the
global shipping system.
There are signs that some bottlenecks are easing, the onset of the Omicron Covid variant could lead
to new shutdowns, sending another disruptive
spasm through the global system.
The gravest appears to be an outbreak of Covid this week in the Chinese manufacturing hub of Zhejiang, which is home to the world’s largest cargo port, Ningbo-Zhoushan.
Tens of thousands are in quarantine under China’s strict zero-Covid policy and some local authorities have urged workers not to travel home “unnecessarily” for lunar new year festival in February.
“Further supply chain disruption is a significant possibility,” economic analysts at Capital Economics said in a note.
Industry experts and economists believe the problems could persist as the finely calibrated network of world trade, already weakened by months of shipping backlogs, labour shortages and geopolitical tensions, remains “discombobulated”.
Maersk, one of the big three shipping companies,
said the worst delays were still on the US west coast where ships were waiting four weeks to unload due
to the lack of workers on land.
“With winter, year-end holidays in North America
and Europe, Chinese new year in Asia, the already stretched supply chain will get even further stretched as workers, truckers and terminals are off for holidays,” a Maersk spokesperson said.
“Normally we can absorb these seasonal impacts fairly quickly, but when already stretched, it just becomes a multiplier,.”
“We do not see major improvements as long as we have line of sight, which is into 2022 ... Very likely that it continues thereafter and for North America even longer.”
In Felixstowe, the UK’s biggest container port, the dockside remains clogged with containers waiting to be emptied, meaning that empty containers coming back on trucks from inland warehouses have to be diverted to other ports.
Robert Keen, of the British International Freight Association, said driver shortages were being felt
all over the world with port infrastructure not
keeping pace with the container vessels. Covid
was “an ongoing problem”, he said.
Flavio Macau, an associate professor specialising in supply chains at Edith Cowan University in Western Australia, said that fine-tuning could take years and that the world economy was still suffering from a
kind of “high blood pressure” as it lurched from one disruption to another.
“Lockdowns are hopefully a thing of the past outside China, but there are still all kinds of restrictions in place to the movement of people, including workers with in-demand skills.
“My view is that supply chains still have high blood pressure, consistently showing arrhythmia.
It will take to mid-2024 to get back to “normal’.”
As well as the possible shortages of Christmas drinks and sugar for festive treats, economies such as the UK and US are facing rising inflation across a range
of goods from energy to apples as a torrent of demand puts pressure on insufficient supply.
Shipping accounts for the movement of at
least 90% of goods around the world and the cost of transporting things by sea has rocketed in the
past year.
For example, the Drewry world container index measuring the cost of moving a 40ft container is 170% higher than it was a year ago. The price on some particularly in-demand routes such as Shanghai to Rotterdam has increased by almost 200%; in the case of the Dutch port to New York, the cost has risen by 212%.
Basic consumer staples are spiralling in price because of higher shipping costs and heightened demand from consumers stuck at home for months and unable to spend any money on treats such as holidays and nights out.
Coffee prices have doubled over the past year, according to current data, as has the price of oats. Lumber, cotton, wheat and palm oil have all risen
by more than 30%.
Not surprisingly, inflation has touched decades-long highs in western economies such as the US, Britain and Germany, bringing calls for an end to the ultra-loose monetary policies pursued by central banks since 2008.
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