Global supply chain crisis won’t ease anytime soon, warn experts

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Across the globe, supplies of different items are running low or running out and experts are warning that the global supply chain crisis is far from finished. The issues with supply and demand caused by the pandemic have far-reaching and long-lasting effects and businesses are not out of the woods yet.

As some bottlenecks start to ease, others begin, and it is these signs that are causing experts to forecast a long road ahead for recovery. A Covid-19 outbreak in the Chinese manufacturing hub of Zhejiang has left tens of thousands of people in quarantine under China’s strict zero-Covid policy and “Further supply chain disruption is a significant possibility,” economic analysts at Capital Economics said in a note.

There are currently delays of up to FOUR weeks for unloading onto the US west coast as there is a severe lack of workers on the ground. This sort of shortage creates a “ripple effect” in the global supply chain crisis, with ships working to tight deadlines and too many containers in the US ports, and not enough in the ports throughout Asia, reports the Guardian.

“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 a line of sight, which is into 2022 … Very likely that it continues thereafter and for North America even longer.”

Dennis Unkovic, a US corporate lawyer, trade expert and author of Transforming the Global Supply Chain, says the Covid crisis had shown that the system was dependent on a just-in-time model designed to run perfectly, “but that’s not what’s happened”. He told the Guardian: “For anyone expecting the post-pandemic world to return to ‘normal’, forget it. Whatever was considered normal before the pandemic is not coming back.

“Companies have to make the supply chain a priority,” he says. “If it breaks down we can’t say we didn’t see it coming.”

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Written by

Claire Gordon