Happy News! The Severe Supply Chain Is About To Be Eased.
According to US media reports, global supply chain problems are easing
November 21st, local time, The Wall Street Journal reported that the previously severe supply chain problems, mainly in container shortages, energy shortages and port capacity constraints, which have improved.Shipping rates have fallen from record levels, but labour shortages may continue to next year.
The Period Of Severe Supply Chain Has Ended.
Louis Kuijs, Head of Asian Economics at Oxford Economics, said the conclusion came from a survey of relevant experts from 45 economies.
A view of the Port of Los Angeles, California, USA, on 29 October. The Port of Los Angeles and the neighbouring Port of Long Beach are major container ports in the United States.
The manager of a furniture company in Foshan, Guangdong Province, China, said that in September this year, the company could barely deliver orders to clients because it could not book containers and that was the company’s lowest period. Since October, the company has been able to book several containers, but the process of confirming with the client still takes up several days of time costs and prices are three to four times higher than they were before 2020.
According to data provider eeSea, the delay of container ships in the United States decreased in October compared with September. With the cost of shipping containers across the Pacific falling by more than a quarter in the week to November 12, the biggest drop in two years, sending a positive signal.
The latest figures released by maritime consultancy and research firm Drewry show that global average ocean freight rates for 40ft containers have been falling for eight weeks up to last week. Prices on the trade route from Shanghai to Los Angeles, while still high, are also down around 19 % from their peak in September. The number of containers stranded at the Port of Los Angeles for more than nine days has also fallen by about one-third from October to the present, said Gene Seroka, the company’s director.
Severe Residual Production Problems In The Supply Chain
It is worth noting, however, that production at factories in various countries is still not good due to labour shortages.
In Asia, for example, some factory owners said they were still struggling to cope with bottlenecks. As we entered June this year, many European and American importers have delayed picking up their shipments as freight rates have soared and many factories have started to build up a backlog of goods. In Vietnam, some production manufacturers say the situation is much smoother than in previous months, but the crisis is still not completely lifted, with high transport costs and labour shortages among the remaining challenges.
The south of Vietnam has the highest concentration of industrial resources in the country, according to government data, from July to September, around 1.3 million workers there left and never returned. The Vietnam Timber and Forest Products Association said a medium-sized furniture factory with about 200 to 500 workers has a capacity utilisation rate of about 80%, but large furniture manufacturers, which typically employ around 3,000 workers, have a capacity utilisation rate of about 65%, due to a recruitment shortage.
The New York Times noted that the shortage of Vietnamese workers could exacerbate global delays in manufactured goods and that several American retailers have turned to Chinese suppliers to alleviate the crisis.
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