Suez-canal incident & the recent covid surge in China caused a global disruption in supply chain

Living in a capitalist economy, we as consumers have become quite dependent on quick shipping and delivery of items to our doorstep. But this past year and a half have brought a cruel awakening that supply chains can be easily disrupted and this self-assured reliance of ours in this mechanism is in dire need of an upkeep. With the advent of the coronavirus pandemic in the late 2019, and the subsequent shut down of factories and trade activities in China, marked the start of this turbulence in global trade. Though the situation has thus improved with trade activities resuming and many economies opening up again, we still haven’t quite reached the usual normalcy levels. In this precarious condition, the recent Suez-Canal debacle and covid surge in China have once more led to tempestuous after effects.

Suez-canal

Egypt’s Suez-Canal is the most important route from Asia and middle east to Europe, comprising of 12% of the entire global trade. The blockage of this channel for six days halted maritime container shipping resulting in delays all over. This single mishap has added millions of dollars to the shipping industry’s costs, and yet this doesn’t imply the end of it as experts predict the impact to roll over for many more months to come- adding to the already stretched supply chain lines, supply snags and surge in demand. Container trade disruption has caused many assembly lines to close down. All of this also points towards a major increase in cost resources in both money and time that ultimately will be borne by the consumers of the global world.

mainland China

Major ports in mainland China have restricted operations due to heavy upturn in new covid cases in the region. One such port, Yantian, known to be a bustling busy port has reportedly faced a disruption in its activities which experts say could lead to even more delays. Diverting some of the traffic to neighbouring ports like Shekou is not very feasible as the condition remains homogenous everywhere. The congested ports and long lines of ships carrying tonnes of containers make up the entire scene at Yantian.

The fragility and pressure points of our supply chain become glaringly obvious when conditions get tough. All of us have experienced the severity of this situation at one point or another, and this is not to be let up for at least a few more months.

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