A new barometer of global supply chain pressures
Supply chain disruptions have become a major challenge for the global economy since the start of the COVID-19 pandemic. Factory shutdowns (particularly in Asia) and widespread lockdowns and mobility restrictions have resulted in disruptions across logistics networks, increases in shipping costs, and longer delivery times. Several measures have been used to gauge these disruptions, although those measures tend to focus on selected dimensions of global supply chains. In this post, we propose a new gauge, the Global Supply Chain Pressure Index (GSCPI), which integrates a number of commonly used metrics with an aim to provide a more comprehensive summary of potential disruptions affecting global supply chains.
Liberty Street Economics
Beijing’s unwavering zero-Covid policy rattles supply chains
With less than a month to go until the start of the Beijing Winter Olympics there is no let up in China’s zero-Covid policy with more and more cities being plunged into lockdown, creating widespread supply chain shocks.
The port of Ningbo-Zhoushan is struggling to shift containers as less than a quarter of registered truckers have the necessary new paperwork to go in and out of the three terminals at Beilun, a district that has gone into lockdown following the detection of a Covid-19 outbreak at a clothing factory over the weekend.
Splash 24/7
Firms hit by new Brexit red tape as IT system stops trucks
U.K. traders are falling foul of a new IT system policing goods crossing the English Channel, as companies grapple with a fresh wave of post-Brexit red tape.
As of Jan. 1, imports from the EU must be processed using the so-called Goods Vehicle Movement Service (GVMS), yet haulers have encountered setbacks such as shipments not loading on the system and reference codes not being accepted. Japanese automaker Honda Motor Co. is among companies that have seen cargoes hit so far.
“We’ve got a whole bunch of lorries that aren’t clearing because something isn’t working, and it’s not incompetence on our part,” said Steve Cock, director of customs consultancy at The Customs House, who has had freight waiting to enter Britain since New Year’s Day. “It’s going to cheese off a lot of people and have a lot of additional charges for vehicles that aren’t getting to the U.K.”
Supply Chain Brain/Bloomberg
Truck drivers, seafarers quit as Omicron spreads
From seafarers refusing to get back on ships to truck drivers whose concern over Covid-related border closures trumps the lure of higher pay, the transport industry is bracing for another roller-coaster year of supply chain disruptions.
As omicron infections surge and governments tighten restrictions, logistics companies around the world, from global giants to small businesses, can’t find enough staff. According to the International Road Transport Union, around one-fifth of all professional truck driving jobs are unfilled, despite many employers offering increased wages. Some pockets of shipping are also sounding the warning bell about future hiring prospects.
Supply Chain Brain/Bloomberg
Europe’s Trade Czar walks line between U.S. and China
For Europe’s top trade and economic official, the past year was largely about undoing damage. Now the agenda shifts to building anew, which promises to be more difficult.
Soon after European Union Executive Vice President Valdis Dombrovskis took his post in late 2019, the bloc’s economy got slammed by the coronavirus. When he added trade to his portfolio in October 2020, trans-Atlantic trade relations were at a postwar nadir.
Today, business people and politicians on both sides of the Atlantic talk more optimistically about commercial relations, and a huge EU financial rescue package is rolling out to member countries.
The Wall Street Journal
Supply chain woes prompt a new push to revive U.S. factories
When visitors arrive at the office of America Knits in tiny Swainsboro, Ga., the first thing they see on the wall is a black-and-white photo that a company co-founder, Steve Hawkins, discovered in a local antiques store. It depicts one of a score of textile mills that once dotted the area, along with the workers that toiled on its machines and powered the local economy. The scene reflects the heyday — and to Mr. Hawkins, the potential — of making clothes in the rural South.
Companies like America Knits will test whether the United States can regain some of the manufacturing output it ceded in recent decades to China and other countries. That question has been contentious among workers whose jobs were lost to globalization. But with the supply-chain snarls resulting from the coronavirus pandemic, it has become intensely tangible from the consumer viewpoint as well.
The New York Times
