Manufacturing activity in Asia is recovering and some of the world’s supply chain bottlenecks are being cleared, but the labor shortage could persist into next year.
The woes of the global supply chain are beginning to abate. But shipping, manufacturing and retail companies say business won’t be back to normal until next year. Freight will continue to be delayed if the COVID-19 outbreak disrupts key distribution hubs.
In Asia, factory closures due to COVID-19, energy shortages and limited port capacity have eased in recent weeks. In the US, major retailers reported importing most of their holiday essentials. Sea freight rates have dropped from record highs.
Still, business leaders and economists say strong consumer demand in the West, port congestion in the US, a shortage of truck drivers and persistently high global freight rates remain. continue to cling to any recovery.
Follow Wall Street Journal Extreme weather and the COVID-19 outbreak also threaten to clog supply chains again.
Removing bottlenecks in the supply chain will allow production to move towards strong demand and will reduce logistics costs. If this trend is maintained, the great pressure on inflation will also ease.
The number of ships waiting to unload at the ports of Los Angeles and Long Beach (California), America’s largest gateway to goods from Asia, improved but remained near a record. There were 71 container ships moored off the coast as of November 19, down from a peak of 86 boats three days earlier, according to the Marine Exchange of Southern California.
Shipping and retail executives expect ships waiting to dock at ports to disappear by early 2022, after the holiday shopping season ends and factories close for a week during the Lunar New Year holiday. hit, reducing output.
Ports around the world, such as the one in Hong Kong, have experienced congestion in recent months. (Photo: Getty Images).
Jan Held, co-owner of German shipping company Held Bereederungs, said congestion has improved, especially in Asia. His ships mainly transport industrial goods such as giant windmills rather than containers, but sometimes it takes a month to wait outside of Asian seaports.
Trans-Pacific shipping rates have cooled in recent weeks as most major US retailers have stocked up on enough merchandise for the holiday season.
The cost of moving a container across the Pacific Ocean fell by more than 25% in the week ended Nov. 12, the biggest drop in two years. Rates rose 5% this week to about $14,700 per 40-foot container and are still more than three times higher than last year’s levels, according to the Freightos Baltic Index.
“Globally, we’ve passed the worst of the supply chain troubles,” said Louis Kuijs, head of Asia economics at Oxford Economics. The research firm’s survey of experts from 45 economies found that most believe all supply chain disruptions have peaked or will peak later this year.
Workers at a Malaysian factory get vaccinated against COVID-19. (Photo: Reuters).
After production slowed down recently due to the COVID-19 outbreak, output at factories in Malaysia, Vietnam and other countries rebounded over the past month as the number of infections fell and restrictions were imposed. remove. This helps ease some of the bottlenecks that have choked semiconductor and textile output globally.
“There has been a big shift in the positive direction and industrial output in Asia and global supply should improve,” said Trinh Nguyen, senior economist at financial services firm Natixis. However, she warned that many countries will continue to grapple with other problems, such as labor shortages.
In Vietnam, factory owners in the South share that production is much smoother than a few months ago, but challenges still exist. Among them are high transportation costs and labor shortages: Many workers have returned to their hometowns to avoid the epidemic and have yet to return.
Mr. Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association said that the situation is improving. Medium-sized furniture factories, with about 200 to 500 workers, are operating at about 80% capacity, he said. But the larger furniture manufacturers, which employ up to 3,000 workers, are far more labor intensive and operate only at 65 percent capacity.
A Chinese factory makes Christmas products. (Photo: Reuters).
In China, the energy crisis that has plagued the country’s manufacturing hubs has eased after authorities allowed coal-fired power plants to charge higher prices. Previously, some factories had limited power output. Oil prices have also fallen after hitting their highest levels since 2014.
According to the interview of Wall Street Journal (WSJ) With some factory owners in Guangdong, production has largely returned to normal capacity since October.
The container shortage also seems to be improving.
Thomas Broertjes, CEO of Guangdong-based Foshan Oufeng Furniture, said in September that he was unable to ship any products because he could not book any containers. “That’s really the lowest bottom,” he commented.
Although Foshan has been able to order more containers since October, the company still has to wait days until it can confirm the order. Shipping is still three or four times what it was before 2020.
“I hope that things are getting better,” he said. The situation cannot get any worse.”
According to VietnamBiz.vn
