The supply crisis worsens

Audio 03:51

A freighter carrying containers, en route to the port of New York, October 13, 2021. © REUTERS - BRENDAN MCDERMID

By: Aabla Jounaïdi Follow

4 min

Containers piling up in US ports - Los Angeles or Long Beach, for example - waiting to be unloaded.

In the world's leading power, and elsewhere, consumption is on the rise again, but undoubtedly too quickly.

As the end of the year holidays approach, the US administration is calling on transport and logistics companies to work day and night to relieve port congestion.

Supply issues are affecting the whole world and it could last until next year.

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You may have to order your Christmas presents much earlier than expected as the deadlines have been increased.

Some transport companies have tripled them.

The causes are numerous and one crisis feeds another.

While factories in Europe or the United States are eager to leave as before the pandemic, several Asian countries which usually provide them with raw materials or components are struggling to regain their pace before the pandemic.

Contaminations due to Covid-19 variants slowed down the full recovery.

Add to that catastrophic weather.

In China, in recent weeks, manufactured goods have been stranded in major ports such as the Yangshan terminal in Shanghai, due to Typhoon "In-Fa".

Two days of blockage in a port for reasons of weather or Covid-19, and the journey of the container can be extended by two weeks.

And transport costs are exploding, inevitably

These costs have increased tenfold in one year for maritime transport.

By far the most important mode of transport.

We also realize this importance when there is a crisis.

Whether it was the

or today in American and Asian ports.

Some companies are taking the lead, demanding surcharges from their customers to ensure timely delivery.

Others, distribution giants like Ikea or Walmart, have bought their own containers and ships to ensure their deliveries.

The other crisis is that of a lack of labor

In the United States, as in Europe, if demand is on the rise, there is a lack of resources to transport goods.

There are not enough key positions in the supply chain, handlers and truck drivers.

Much has been said about the case of the United Kingdom, which due to Brexit is deprived of at least 100,000 drivers who usually come from Europe.

The United States also has a big labor problem.

The candidates do not rush for these positions considered difficult.

And that compounds the headache of decongesting ports.

Meanwhile, in Europe, factories devoid of components are slowing down

The return to pre-crisis industrial production levels was hoped for this year.

But the IMF's forecasts have been revised downwards.

The latest example, the Italian-American CNH industrial has suspended its production of agricultural machinery and cars ... for lack of semiconductors.

In Germany, automobile production fell to its 1975 level. The situation gave the G7 governments an opportunity to position themselves in favor of independence vis-à-vis raw materials and components from Asia.

Wishful thinking for now.

What awaits, for the moment, it is the shortage of stock or an increase in the prices of several products affected by delivery delays.

Perhaps starting with your future Christmas present ...

IN SHORT

► Another obstacle to production, the rise in energy costs. It is historic in China. Chinese workshops had not seen this for 25 years. Chinese power plants are still running on

but they cannot pass this increase on to their customers because the authorities regulate current prices. Consequently, the power plants produce less while at the same time, the demand from the factories is strong. Costs are therefore exploding for companies. + 10.7% in one year ... unheard of since 1996. Despite an easing of rationing last week, the scale of the rise in costs has forced factories to close their doors totally or partially.

Read also: China: sharp rise in producer prices due to the cost of energy

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