The Maritime Industry and the Global Supply Chain Crisis
The global supply chain, which describes the networks of manufacturing and delivery of items across multiple countries around the globe, has helped industries and manufacturers be more effective and profitable, while also helping other businesses expand internationally. It is a very complex process where if one section stalls, then it can impact other sectors. Although the COVID 19 pandemic is a factor in the global supply crisis that is occurring, it is not the sole cause. The fact of the matter is a series of events occurred that ultimately caused the situation that the Global Supply Chain is currently facing. The importance of the Global Supply Chain cannot be ignored. It is responsible for the moving of raw materials to convert to finished products, product transportation and distribution, as well as serving as a way to manage the logistical aspects of business operations. (Duke Fuqua, 2021)
In a survey done in 2020, 450 industry executives found that 62% of firms saw disruptions in the supply chain, ranging from 20% and 80% in total volume. 46% of those executives cited that the dependence in unreliable partners and governments was considered to be one of the causes to the disruptions. (Maryville University, n.d.) To make matters worse, the heat waves happening around the world has contributed to the crisis, especially in China, which has been hit hard by the heat wave this year and has caused the country to shut down key manufacturing due to their government’s need to make planned power cuts. This in turn has had a ripple effect, impacting trade negotiations in Europe with port workers. The port of Felixstowe, which is the United Kingdom’s largest container port, has seen major labor discord. Around 40% of all containers that move through the UK are processed at Felixstowe. Any strikes that occur will cause major trade delays, further affecting the Global Supply Chain. (LaRocco, 2022)
Aside from the setbacks caused by the climate situation in China and around the world, the cost of living keeps going up, which is considered to be the main factor for the worker unrest being seen in the UK at this time. Workers are demanding wage increases to rectify the rising costs being caused by the impact of inflation. The way things are going, the chance of future strikes is a growing possibility that will cause additional disruptions to the Global Supply Chain. Other disruptions caused by shortages in truck drivers and labor has also been rising, causing issues for the ports and warehouses in the supply chains. The Russian invasion od Ukraine is being seen as the main cause for this inflation that is being seen in the world economy. The attacks have caused major disruptions in the transport of grain from Ukraine, causing food crisis in other countries. The shortage of fertilizer has also drastically affected agriculture in other countries. These setbacks cause other issues in the supply chain, even affecting the delivery of semi-conductors for computers that are sent to global manufacturers. (Hellenic Shipping News Worldwide, 2022)
There is still hope that the Global Supply Chain can recover. The congestion in ports due to the many setbacks has been easing down, and the shipping rates and delivery times are lowering as well. Although things seem to be improving, experts say it could take many years for things to fully return to normal. (Rowsell, 2022) Digital tracking has been suggested to ease the logistical delays caused by transportation jams in the global supply chain, which would greatly help in the recovery from this crisis. Improving tracking and tracing will assist in identifying any logjams that can occur which will greatly help delivery issues. The prioritization of the public health infrastructure in the industry to combat the public health challenges affecting the workforce is a necessity. If the infrastructure is effective in fighting any future pandemics or other health issues, it can really improve the economic productivity of the global supply chain and is a step on the right track to the road of recovery. (West, 2022) Also, with Ukraine slowly trying to regain control of their territories from the Russian invasion, there may be hope for recovery from the disruption in the food supply, and ultimately, the complete recovery of the global supply chain.
References
Duke Fuqua. (2021, December 13). Three Factors Contributing to the Ongoing Global Supply-Chain Crisis. Retrieved from Duke Fuqua School of Buisness: https://www.fuqua.duke.edu/duke-fuqua-insights/robert-swinney-three-factors-contributing-ongoing-global-supply-chain-crisis
Hellenic Shipping News Worldwide. (2022, September 12). 5 challenges facing global supply chains. Retrieved from Hellenic Shipping News Worldwide: https://www.hellenicshippingnews.com/5-challenges-facing-global-supply-chains/
LaRocco, L. A. (2022, August 16). The U.S. supply chain is now facing two trade hurdles. Retrieved from CNBC: https://www.cnbc.com/2022/08/16/the-us-supply-chain-is-now-facing-two-trade-hurdles.html
Maryville University. (n.d.). Global Supply Chain Management: Effects from a Pandemic. Retrieved from Maryville University: https://online.maryville.edu/blog/global-supply-chain-management/#:~:text=The%20global%20supply%20chain%20helps,to%20expand%20into%20international%20markets
Rowsell, J. (2022, August 16). Are supply chain challenges easing? Retrieved from CIPS.ORG Supply Management: https://www.cips.org/supply-management/news/2022/august/are-supply-chain-challenges-easing/
West, D. M. (2022, July 12). Six ways to improve global supply chains. Retrieved from Brookings: https://www.brookings.edu/research/six-ways-to-improve-global-supply-chains/