The global supply chain is stuck again firms are already feeling the effects

The global supply chain is stuck again. The COVID-19 raging in China causes congestion in ports and problems in internal transport. In addition, there is a war in Ukraine as you know, which has also, directly and indirectly, blocked the supply of goods. We are already facing the effects of this. And it will only get worse.

Automotive industry is hit once again  once again

The automotive industry is experiencing a shock, because the war in Ukraine has contributed to the effects of the pandemic and the still large problems with the availability of semiconductors”says Jakub Faryś, president of PZPM

Moreover China continues to fight the COVID-19 pandemic. Many neighbourhoods in Shanghai remain closed, and people are allowed to leave the house only to undergo a coronavirus test. As of April 11, Shanghai has been divided into three types of zones: restricted, controlled and precautionary zones. Membership in a given zone is determined by the number of positive COVID-19 test results.

The closure of such a large industrial centre caused transportation problems. There is a shortage of drivers willing to travel the routes – everyone is afraid of a positive COVID-19 result, which means that they will have to be locked up in isolation rooms. Logistics problems inside the country had an impact on the situation in the ports. The port of Shanghai, as the largest in the world, is currently congested.

Global supply chain broken because of many reasons

The global supply chain was broken not only because of the situation in China. The war in Ukraine is not without impact. It is not only about excluding the country from transit, but also about production problems. In addition, there are sanctions imposed on Russia and Belarus.

Inflation up partly because of it

The effects of disturbances in the global supply chain are already noticeable in the form of inflation. “We already feel the impact of disruptions in supply chains on prices in the form of constantly rising inflation, but we can expect that in the coming months the increases in production costs and, consequently, in prices of goods, will be even greater. The situation in both China and Ukraine is very dynamic, and scenarios for further developments may change quickly” notes Przemysław Piętak, Director of Supply Chain Consulting at CBRE.

Source: BusinessInsider


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