Still, some factory workers have been operating through closed-loop management, which keeps the workers isolated inside, while for some it is becoming very hard with the rapid spread of the COVID-19. This is putting restrictions on either procurement of raw materials or shipping them off.

Foxconn Interconnect Technology, a unit of Taiwan based in Foxconn, makes data transmission equipment and connectors. The company is working in a closed loop with 60% capacity. This is just one example, there are several other companies that are operating in similar ways.

Last week, more than 30 Taiwan companies involved in making electronic parts had to suspend their production.

China is currently on a zero-tolerance policy against COVID-19 despite low cases. At Least 87 of China’s 100 largest cities by GDP are facing some sort of restrictions or the other.

The main impact is being felt on the truck transport causing long queues and further delays. Even the price for hiring trucks has shot up drastically i.e, from 7,000 yuan ($1,100) to 30,000 yuan.

Almost half of the German firms in the country are experiencing supply chain problems. To cushion the impact, China has kept the ports as well as the airports up and has encouraged the principle of working in a closed-loop.

The post China’s COVID curbs threaten global supply chain appeared first on International Finance.

The Suez Canal, which separates Africa from Asia, is one of the busiest trade routes in the world, especially for oil tankers. The canal, which is around 193 kilometres long, handles around 12 percent of the global cargo traffic. Approximately around 50 ships pass through the canal each day.
On March 23, the Ever Green container ship, which is one of the largest in the world, got stuck in the canal due to strong winds. The container ship, with a displacement of 220,000 tonnes and a length of 400 meters completely blocked the canal. The blockage was the source of much worry and frustration for the global shipping industry. As of Sunday, around 369 ships were stuck on either side in a tailback waiting to pass through the canal.

Impact on Chinese economy

The blockage is expected to have a minimal impact of the Chinese economy, since most of China’s intermediate supply chains are located in the Asia- Pacific (APac) region. In this regard, Steve Cochrane, Moody’s chief economist for the Asia-Pacific region told the media, “Many of [Asia’s] intermediate supply chains are located within the Asia-Pacific region, which should initially mute the impacts of supply and price. Much depends upon the length of the shutdown of the canal.”
The blockage, however, will force logistics and supply chain firms to reconsider their routes or to diversify their supply chains and not rely on one route to avoid similar instances in the future. Global supply chain has already taken a severe hit last year due to the coronavirus pandemic.

China-Europe freight train service shines

Traders based in China have also seen a limited impact on their operations as a result of the blockage. Even though the container ship was refloated on March 29 and traffic resumed, traders were already seeking alternatives to move their goods. As a result of the Suez Canal blockage, traders were already turning to more reliable alternatives such as the China-Europe freight train service.
Chinese media houses reported that China-Europe freight train service witnessed a surge in demand, with shipping rates rising by 10 to 20 percent in some cases. Many traders are now seeking stable and safe options to move their goods up and down the supply chain.
Zhou Shihao, founder and CEO of YQNLINK told Chinese media, “Some of our goods are stranded on the Evergreen Marine and other ships queuing in the canal, and we are offering more alternatives for our clients with urgent needs. One is to use cross-border cargo trains.”

Impact on global trade

According to Lloyd’s List, the Suez Canal blockage, which lasted for six days, led to losses of around $9 billion roughly per day. This is equivalent to $400 million worth of trade per hour. Based on just the cargo shipments that were halted by the blockage, the total trade loss has been estimated at roughly $54 billion.
Germany-based insurer Allianz revealed in its analysis that the blockage could shun global trade growth by 0.2 to 0.4 percent. Osama Rabie, chairman at Suez Canal Authority believes the Canal’s revenue alone took a hit of $14 million to $15 million per day as a result of the blockage.

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The integration of Unifeeder and Feedertech will help DP World improve its global supply chain.

It will also subsequently strengthen the capabilities of DP Word’s main ports in Dubai’s Jebel Ali, and ports in India, Africa and Europe.

Unifeeder, which recently acquired Feedertech, operates feeder and shortsea services around northern Europe and throughout the Mediterranean and Northern Africa regions.

Feedertech also provides similar services that connect ports in South East Asia, the Indian subcontinent and the Middle East.

Sultan Ahmed Bin Sulayem, Group Chairman and Chief Executive Officer said: “DP World’s vision is to become the leading end-to-end supply chain solutions provider and contribute to strengthening the position of the countries in which we operate.

“Our smart logistics and feedering and shortsea services, combined with our worldwide network of ports, terminals and storage facilities around the world, together with our increasing logistics capabilities on land, as we own rail services in Europe and India, mean that we can offer truly innovative solutions to our customers.”

Last month, DP World and the Saudi Ports Authority (Marwani) launched a new shipping line that will connect the Port of Jebel Ali in Dubai with Egypt’s Port of Sokhna through the Jeddah Islamic Port in Saudi Arabia.

During the same period, DP World also completed the acquisition of a 51 percent stake in TIS Container Terminal in the Port of Yuzhny in Ukraine.

According to DP World, the acquisition of TIS Container Terminal will help the company expand its operations as well as strengthen TIS Container Terminal as one of the key market-leading purpose-built terminals in Ukraine by leveraging DP World’s global network of ports, economic zones, warehousing, and inland logistics solutions.

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