Russia-Ukraine War Creates Further Supply Chain Issues
28 March, 2022 by
Russia-Ukraine War Creates Further Supply Chain Issues
Charlie Leib

Are we in for a longer, more drawn out supply chain and shipping crisis even as COVID restrictions domestically and internationally are apparently easing? Most likely, thanks due to the crisis in Ukraine as well as a new COVID-19 lockdown in one of China's manufacturing hubs.

According to Yahoo! Finance, Overall, ocean dwell times (the time it takes to secure the shipping vessel, discharge, or load the cargo) increased in recent weeks. Export dwell times across all European ports increased by 36 percent since February 17th, while Transshipment dwell times for European ports up 41 percent, according to real-time supply chain visibility platform FourKites.

Furthermore, recent new lockdowns in various provinces across China means that "the supply chain must prepare for another turmoil in the coming months, impeding the flow of container movement as importers worldwide prepare for the coming peak season later this year," Container xChang, a global logistics company, said in a statement on March 14.

Add to that the growing and recent spike in diesel fuel costs.

Companies and economies around the world are reeling because of the effects of these supply chain disruptions.

"If we think about what global shipping does for the global economy, the globalized economy is unthinkable…without shipping," said Elisabeth Braw, a senior fellow at the American Enterprise Institute, recently said on Yahoo Finance Live. "Shipping accounts for 90 percent of trade that is being sent between different parts of the world. If shipping can't continue as it has been working until now, then we will see a reduction in economic activity. There is no industry more transnational than shipping because it physically crosses borders, maritime borders, every single day of the year.”

The International Chamber of Shipping, which represents 80 percent of the world’s merchant fleet, recently warned that current supply chain disruptions are set to be worsened by a shortfall in shipping crew due to the war, and the fact that Ukraine and Russian seafarers account for 14.5 percent of the global shipping workforce, according the Chamber.

As noted above, surge in Covid-19 cases led Chinese manufacturing hubs Shenzhen and Changchun to lock down in recent days, halting production at many electronics factories in the latest threat to the world’s battered supply chain.

So, it looks as if we are not out of the woods yet, but as more moviegoers are getting back into the habit of seeing films on the big screen, there is a light at the end of the tunnel.

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Russia-Ukraine War Creates Further Supply Chain Issues
Charlie Leib 28 March, 2022
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