Natural disasters are just one cause of disruptions to supply chains. They usually result in widespread damage to several firms and facilities at the same time. This has a severe impact on an industry and significant time is often required for recovery from these occurrences. Other global events have conspired to drive international supply chains towards the breaking point, threatening the fragile flow of raw materials, parts and consumer goods, according to companies, economists and shipping specialists. A new worldwide wave of the COVID-19 variant, natural disasters in China and Germany and a cyber attack on South African ports have all conspired to severely affect the global supply chain.
The Delta variant of the coronavirus has devastated parts of Asia and prompted many nations to cut off land access for sailors. That's left captains unable to rotate weary crews and about 100,000 seafarers stranded at sea beyond their stints in a flashback to 2020 and the height of lockdowns. Given that ships transport around 90% of the world's trade, the crew crisis is disrupting the supply of everything from oil and iron ore to food and electronics.
Asia, the nucleus of manufacturing, has been hit hard by Covid , and now, the Delta variant. An outbreak at one of the world’s busiest ports in southern China has led to global shipping delays, while infections at key points in the semiconductor supply chain in Taiwan and Malaysia are worsening a global chip shortage that has hindered production in the auto and technology industries.
The new headaches add to inflation concerns, after China and the U.S. this week recorded their biggest annual jumps in factory-gate prices and consumer prices, respectively, in more than a decade. If such problems continue, and get worse, they could weigh on global growth.
Massive Flooding in Europe and Asia Add to the Headaches
Heavy rainfall and flooding have devastated parts of western Europe. Some of the most severe flooding happened in Germany and Belgium. Parts of Switzerland, Luxembourg and the Netherlands have been affected as well. This weather phenomenon is really going to disrupt the supply chain because the railway links have all been broken. Railways coming from the Czech Republic and Slovakia into the German ports of Rotterdam and Hamburg have been seriously disrupted. Thyssenkrupp, the German steel making giant could not get raw materials due to the flooding. These supply chain disruptions will have an effect on industries such as the auto industry, domestic appliances and related manufacturing. Considering these issues along with the chip shortage and we may see a further slowing of domestic auto manufacturing.
Meanwhile, the disruption caused by the flooding in the Chinese province of Henan is made worse by the fact that the province is landlocked. The distribution of wheat and coal has been seriously affected. Henan is the bread basket of China and has produced 38 million tons of wheat this summer.
Cyber Attacks Are Disrupting Operations
In the U.S. we are familiar with the disruptions of recent cyber attacks on our infrastructure. Transnet, the operator of South Africa’s major ports and a national freight rail line, was hit by a major cyber attack last week, further disrupting operations at Cape Town and Durban, which have also been harmed by a period of civil unrest in the country this month. Satellite tracking from Marine Traffic shows a double-digit number of ships backing up at both Durban and Port Elizabeth, with the start of a queue also beginning to form outside Cape Town’s terminals.
A local truckers’ association told customers yesterday it does not expect any cargo to move in or out of Durban until the cyber attack is fixed.
We are facing a myriad of new threats from the pandemic to nature to computer terrorists. Managing these threats will require logistics planning like we have never before experienced. Now is certainly the time to reach out to Logistics professionals.
Contact us @ www.Land-Link.com to explore options for your organization.
Stay Safe Everyone.
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