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talkpolitics2021-10-26 08:45 pm
abomvubuso) wrote in talkpolitics2021-10-26 08:45 pm
The supply chain is creaking
The supply chain crisis, which threatens economic recovery, could continue for another year if world governments do not intervene. Experts are calling for increased government investment in expanding the capacity of ports, railways, roads and storage. There needs to be support to move people from some parts of the economy where demand is not so strong to more key parts where demand is very strong and important for global supply chains.
The volatility of consumer demand during the pandemic, coupled with obstacles to the shipping industry and the negatively affected aviation sector have all led to the worst supply chain crisis in years. In addition to sharp demand reversals, shipping companies have faced a coronavirus-related shortage of port staff and a shortage of truck drivers in the UK, Europe and the US who are essential for transporting goods to their final destinations and returning empty containers. Recent disruptions in supply chains have led to empty shelves in stores and higher prices for an array of products.
US President Joe Biden is pushing to increase the capacity and productivity of rail transport, truck transport and ports to meet increased demand. The situation in the United States that is definitely causing concern. Negotiations between West Coast port terminal operators and workers are due next year, with Ocean Network Express CEO expecting the process to be complicated. In fact the expectation is that this may continue until the end of next year and into early 2023.
The forecast that the crisis could spill over into 2023 is one of the most pessimistic for the sector. But many in the shipping industry are convinced that it will definitely have an impact in 2022.
Last week, the WTO Director-General said the problems with global supply chains could drag on for months, driven by the shipping companies' difficulties in filling the supply-demand gap and tackling the continuing shortage of containers. Problem is, the shipping sector might not have expected such a strong economic recovery. So they've reduced the available containers and now there is a shortage. In addition, the situation is being complicated by the varying levels of vaccination from place to place, as there is a global recovery at two speeds - some economies are starting to pick up pace while others remain stagnant, and this is causing major discrepancies which then translate onto the market. In any case, these disruptions are likely here to stay at least for another year.
The volatility of consumer demand during the pandemic, coupled with obstacles to the shipping industry and the negatively affected aviation sector have all led to the worst supply chain crisis in years. In addition to sharp demand reversals, shipping companies have faced a coronavirus-related shortage of port staff and a shortage of truck drivers in the UK, Europe and the US who are essential for transporting goods to their final destinations and returning empty containers. Recent disruptions in supply chains have led to empty shelves in stores and higher prices for an array of products.
US President Joe Biden is pushing to increase the capacity and productivity of rail transport, truck transport and ports to meet increased demand. The situation in the United States that is definitely causing concern. Negotiations between West Coast port terminal operators and workers are due next year, with Ocean Network Express CEO expecting the process to be complicated. In fact the expectation is that this may continue until the end of next year and into early 2023.
The forecast that the crisis could spill over into 2023 is one of the most pessimistic for the sector. But many in the shipping industry are convinced that it will definitely have an impact in 2022.
Last week, the WTO Director-General said the problems with global supply chains could drag on for months, driven by the shipping companies' difficulties in filling the supply-demand gap and tackling the continuing shortage of containers. Problem is, the shipping sector might not have expected such a strong economic recovery. So they've reduced the available containers and now there is a shortage. In addition, the situation is being complicated by the varying levels of vaccination from place to place, as there is a global recovery at two speeds - some economies are starting to pick up pace while others remain stagnant, and this is causing major discrepancies which then translate onto the market. In any case, these disruptions are likely here to stay at least for another year.