Global supply chains are sliding towards breaking point, pushed by a fresh wave of COVID-19 outbreak, natural disasters in Germany and China, and a cyberattack on South Africa’s major ports. The events are threatening the fragile flow of commodities, which could weigh on the world’s post-pandemic economic recovery, according to companies and analysts.
The highly infectious SARS‑CoV‑2 Delta variant is spreading fast in parts of Asia which prompted countries to reimpose restrictions. As one of the impacts, weary shipping crews are stranded at sea as their peers on land cannot replace their shifts. Maritime shipping carries around 90% of goods traded worldwide. The crisis could significantly disrupt the supply of everything from iron ore and crude oil to food and electronics.
Hapag Lloyd said the crew crisis is “extremely challenging.” The German container line said vessel capacity and equipment availability are scarce while operating rates at some ports are not really improving. The company expects the disruptions to last until the fourth quarter.
Heavy floods in China and Germany have also ruptured global supply lines. In China, coal transports from producing regions such as Shanxi and Inner Mongolia were curtailed in a time when power demand surged amid summer. German floods disrupt product shipments through roads and the river Rhine.
Last week a cyber attack hit the South African container ports of Durban and Cape Town. Meanwhile, hundreds of thousands of British workers were told to self-quarantine at home, which led to supermarkets warning of supply shortages and some fuel stations closing. In Asia, Toyota said it temporarily suspended production in Thailand and Japan due to shortages of some parts. A South Korean auto part maker said costs of raw materials, including steel, had surged partly due to rising shipping costs.
