New Wrinkle in Supply Chain Mess?
Something that separates one country from another is its ability to effectively deal with problems.
Two countries may face the same dilemma. But one country’s ingenuity, problem-solving capabilities and hard work allow it to handle the issue sooner and better.
Here in America, we like to think of ourselves as the best. At just about everything. Like the rest of the world, we’ve been dealing with supply-chain problems for a while now. But we’ve made considerable progress toward straightening it out.
However, there’s another potential monkey wrench in the system. It’s the new COVID-19 variant. Omicron is threatening to further disrupt an already troubled situation. Just in time for the holidays.
It’s been ‘massively disruptive’
U.S. Commerce Secretary Gina Raimondo is one of those concerned Omicron could put additional pressure on the global supply chain.
"It’s way too soon to tell,” she told CNN Business. “But I do worry because we know people are afraid to go to work."
She added, “In manufacturing facilities, people work in person, close together. And there have been outbreaks. We’ve had problems in places where people work close. It’s massively disruptive."
She added that this is a global issue. Outbreaks on the opposite side of the world can result in layoffs. And higher prices. “It’s complex,” she said. “That means it’s very hard to solve quickly.”
‘Another test of resilience’
Per Hong is a senior partner at Kearney. It’s a management consulting company headquartered in Chicago, Illinois. Here’s what he told CNBC.
“Omicron is certainly setting up to be yet another test of resilience for global supply chains that were already under stress and in the midst of a lengthy healing process.”
Many products originate in China. The country could see its production and distribution slow due to the variant.
“China is expected to double down on its zero-COVID policy,” Hong said. “In the past (that) has included mass lockdowns of entire cities (and) enforced quarantines.
“As well (as) strict checks at ports. Including monitoring ships and cargo, to prevent cases from coming in.” Other analysts have made similar comments.
Are China lockdowns coming?
Sian Fenner is the lead Asia economist at Oxford Economics. She also communicated with CNBC about the potential problem.
“Supply chains remain vulnerable to pandemic-related disruptions. With the Omicron variant highlighting that the crisis is not yet over.”
Of the world’s top 10 busiest ports, seven are in China. That’s according to the World Shipping Council. Hong added that if China orders more lockdowns, it will have a huge ripple effect.
“Not only will shipping be constrained,” he said. “But we are certain to see yet more shortages of key manufacturing components. And extended order backlogs for core electronic, automotive and consumer products. Depending on regions impacted.”
Year-long problem not over yet
Supply chain problems have been going on all year. They’ve been caused by COVID-19, floods and container shortages. Plus energy crises in China and Europe, factory shutdowns in Vietnam, and more.
Fewer than one-half of the world’s cargo ships have arrived at ports on time during 2021.
Even following arrival, many sat in ports waiting for understaffed docks to unload them. And even after being unloaded, there weren’t enough truck drivers to distribute the goods.
Most of us have been affected by these issues. Especially while waiting for slow deliveries. Analysts said the problems were finally stabilizing. But a new wrinkle in the pandemic could cause a serious setback.
Supply chain still under pressure
Analysts from TS Lombard in London, England say Omicron is a threat to regional exports recovery.
“Most governments in the region are likely to resist re-imposing severe restrictions,” they said in a statement. “But the bottom line is that supply chains will remain under pressure while the COVID threat persists.”
And that means fewer items for holiday gifts on store shelves. And higher prices for items you can find.
Jennifer Blackhurst is a professor of business analytics at the University of Iowa. Here’s what she told Fox News.
“Companies are doing everything they can. But it’s just disaster upon disaster upon disaster upon disaster that’s causing all of these problems in the supply chain.”
Patriot Power Cell
Regardless of how much the Omicron variant affects the supply chain, you’re going to need backup power in 2022. My recommendation is the Patriot Power Cell.
We all know how important it is to keep our cellphones and other electronic devices charged. And that’s what this pocket-sized power plant was designed to do.
You can charge it with the free power of the sun. It has a built-in flashlight. And it’s rugged to withstand the elements. Knowing you can stay connected to loved ones in an emergency provides peace of mind.
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