What awaits supply chains after the holiday season ends?

Retailers may breathe a sigh of relief after the end of the Christmas holidays, crowning months of painstaking planning to keep shelves full during a busy shopping spree, but that may not be a respite.

A new indicator from the Federal Reserve Bank of New York that tracks pressure on global supply chains revealed a slight decline between last October and November. “The indicator seems to suggest that global supply chain stresses, while still historically high, have peaked and may begin to moderate. in some way in future, “New York Fed researchers said this week.

But analysts looking to 2022 are not convinced that conditions will improve in meaningfully. They see that the effect of the highly contagious variant of omicron has not been fully realized, especially as some Asian countries are trying to crack down on the Corona virus outbreak.

Infections record caused a shortage of workers in ports e in other transport hubs, while policies “zero COVID “are hitting producers who were desperate to keep production in track after the increase in demand for goods.

“We are already seeing a shortage of manpower in the entire supply chain, ”says Martin Dixon, director of research products at consulting firm Drewry.

Chip makers Samsung and Micron have been forced to adjust operations in the Chinese city of Xi’an, an industrial hub that has been under a severe lockdown since December 23.

Freight rates for 40-foot containers from Asia to the west coast of North America fell by about 25% in November at the end of the high season and have been flat for some time, said Judah Levine, researcher senior of the Fritos Group. But prices have started to rise again in view of February’s Lunar New Year holidays, as consumer countries like the US stockpile items before factories close in China. The cost of shipping a 40-foot container from Shanghai to Los Angeles increased 3% this week to $ 10,221.

But Levine doesn’t think fares will return to peak season levels. However, he believes it will remain high “as long as demand remains strong and ports continue to cope with congestion.”

“These factors will not diminish until there is a decrease in consumer spending on goods, which does not seem imminent, especially as the severity of infections with the new Omicron mutant increases,” he said. Retailers are also working hard to rebuild out of stock, which leads to increased orders.

Levin believes that “the return of the situation to its true nature will occur slowly and most likely will occur in the year 2023”.

And CNN revealed that a slight cost moderation starting last fall won’t make life much easier for companies all along the supply chain. The giant of the mobile Ikea stated in a recent statement that it will raise prices in its stores in media 9% in 2022 to help offset higher costs, including transportation costs.

Some automakers have indicated they don’t expect it to be in able to increase production in the first half of questyear due to the persistent shortage of chips for computer. “The scarcity of chips will also accompany us in 2022, in particularly in the first half, “said Markus Schaefer, chief technology officer of Daimler, the manufacturer of auto Mercedes-Benz. “We do not expect significant capacity increases in the first half of the year.”

Read More About: Business News

Follow AsumeTech on

More From Category

More Stories Today

Leave a Reply