Finance:2021 global supply chain crisis
In 2021, global supply chains and shipments slowed, causing worldwide shortages and affecting consumer patterns.
Causes
In early 2020, the COVID-19 pandemic initially slowed the global supply chain as manufacturers suspended work until safety precautions were enacted. Despite rosy forecasts from businesses for the next year, global trade continued at a reduced capacity and did not fully recover. New challenges in 2021, including the delta variant and reduced access to the COVID-19 vaccine in developing countries, further exacerbated the recovery of global production even as wealthier, vaccinated economies, such as that of the United States and Europe, resumed their patterns of consumption.[1]
Vietnam, for example, is a major provider of American apparel. The country worked through the pandemic's first year with a strict lockdown procedure, but the delta variant closed manufacturers, especially as workers remained largely unvaccinated. To sustain production, the Vietnamese government has required regions at higher risk to instead live at their workplace. Additionally, half of the sailor population comes from developing, under-vaccinated countries.[1]
Shipping
By mid-2021, major American ports became inundated with historic amounts of inbound cargo. Terminal staff lacked the bandwidth to process the cargo, leading to extended wait times. Container ships began to stall outside ports for days or weeks. This surge spread inland as rail and trucking services struggled under the increased load alongside a labor shortage. The American trucking industry was already short on drivers before the pandemic, with high turnover and subpar compensation. Though enough shipping containers exist to handle global needs, given the amount held in transit or the wrong part of the supply chain, containers entered short supply.[1]
Effects
Large American retailers chartered container ships in early preparation for the holiday season.[1] Container shipping companies are encouraged to develop and innovate technology-driven processes in shipping to achieve external influence free shipping.[2]
On October 17, 2021, United States Secretary of Transportation Pete Buttigieg predicted that the crisis will "certainly" extend into 2022.[3]
See also
- Shortages related to the COVID-19 pandemic
- 2020–2021 global chip shortage
References
- ↑ 1.0 1.1 1.2 1.3 Nguyen, Terry (2021-09-02). "You can buy stuff online, but getting it is another story" (in en). Vox. https://www.vox.com/the-goods/22650965/supply-chain-delays-2021-ongoing.
- ↑ Notteboom, Theo; Pallis, Thanos; Rodrigue, Jean-Paul (June 2021). "Disruptions and resilience in global container shipping and ports: the COVID-19 pandemic versus the 2008–2009 financial crisis" (in en). Maritime Economics & Logistics 23 (2): 179–210. doi:10.1057/s41278-020-00180-5. ISSN 1479-2931. PMC 7781181. https://link.springer.com/10.1057/s41278-020-00180-5.
- ↑ CNN, Devan Cole and Jason Hoffman. "Buttigieg says US supply chain issues will 'certainly' continue into 2022". https://www.cnn.com/2021/10/17/politics/pete-buttigieg-supply-chain-issues-cnntv/index.html.
Further reading
- Cohen, Patricia; Rappeport, Alan (2021-10-12). "World’s Growth Cools and the Rich-Poor Divide Widens" (in en-US). The New York Times. ISSN 0362-4331. https://www.nytimes.com/2021/10/12/business/economy/imf-world-economic-outlook.html.
- Farrer, Martin (2021-10-02). "‘A perfect storm’: supply chain crisis could blow world economy off course" (in en-GB). The Guardian. ISSN 0261-3077. https://www.theguardian.com/business/2021/oct/02/supply-chain-world-economy-energy-labour-transport-covid.
- George-Parkin, Hilary (2020-10-20). "Why everything from furniture to diet soda is so hard to buy right now" (in en). Vox. https://www.vox.com/the-goods/21509105/back-order-furniture-heat-lamps-appliances-supply-chain.
- Goodman, Peter S. (2021-10-22). "How the Supply Chain Broke, and Why It Won’t Be Fixed Anytime Soon" (in en-US). The New York Times. ISSN 0362-4331. https://www.nytimes.com/2021/10/22/business/shortages-supply-chain.html.
- Heilweil, Rebecca (2021-10-16). "No, the supply chain mess is not a war on Christmas" (in en). Vox. https://www.vox.com/recode/22728904/supply-chain-semiconductors-christmas-holiday-shopping-shortages.
- Riordan, Primrose; White, Edward; Dempsey, Harry (2021-10-17). "China’s energy crisis threatens lengthy disruption to global supply chain". Financial Times. https://www.ft.com/content/5174e592-1f0b-4334-91ab-aa89ceff3821.
- Lange, Jeva (2021-10-12). "The supply chain is an unlikely Ghost of Christmas Present" (in en). The Week. https://theweek.com/business/1005888/the-supply-chain-is-an-unlikely-ghost-of-christmas-present.
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