Business & Investment

Supply chain pillars for the spillover effect of the Suez Canal blockage

Global supply chains have felt the impact of the Suez Canal backup for weeks, and as the economic recovery from the pandemic continues, the situation could exacerbate the chokepoints of ports on the west coast of the United States.

According to supply chain analyst Glenn Koepke, the trans-Pacific freight route to the United States has increased waiting times at the already crowded terminals of Los Angeles Harbor and Long Beach, with many shippers receiving goods. He said he would look for an alternative route.Visibility platform Four Kites. Kopeika quoted a week’s waiting time in Los Angeles and Long Beach, even before the Evergreen Line “Evergiven” vessel ran aground on March 23 and stopped traffic through the waterways for a week. He said the imminent delay only exacerbated the problem.

Koepke, Senior Vice President of Customer Success at FourKites, said: Via the coast or the Panama Canal to avoid chokepoints.

Other spillovers could probably last in 3-6 months until the company fails to reach its first-quarter sales target or the situation begins to stabilize if the product fails to market on time. It may include a sexual supply imbalance.

According to information from data analytics firm Dun & Bradstreet and supply chain technology firm E2Open, US grocery stores, department stores, automotive and household goods stores, surgical and medical device suppliers are one of the hardest hit industries. .. Release report this week About the spillover effect of the incident. According to the two companies, the top materials found in shipments from the Suez Canal to the United States include kitchen and bathroom linen, electrical and photosensitive materials, construction materials, toys, furniture and pharmaceuticals.

Since Suez is the main artery for sea freight in Asia and Europe, Europe will feel the effects of obstruction most strongly.

“Although considerable attention has been paid to the economic value of cargo trapped in vessels and the inability to pass through the Suez Canal, the economic impact on downstream production that relies on the timely delivery of these materials is far greater. It’s big, “says Pawan Joshi. Executive Vice President of Product Management and Strategy at E2Open. “For example, a delay in cheap and important auto parts along the way from China can hinder the sale of the entire vehicle in Germany.”

Koepke agreed that port shortages and backlogs across Europe could lead to spikes in storage fees and other costs. For example, we anticipate a surge in spot rates for containers from Asia to Europe, and as shippers shift some cargo from sea to already tight airline capacity, so will the price of air cargo. I’m expecting it.

“Companies with important cargo need to broadcast it quickly,” said Kopeika. “We continue to see lumps, rising prices, and the impact on air cargo.”

Supply chain pillars for the spillover effect of the Suez Canal blockage Supply chain pillars for the spillover effect of the Suez Canal blockage

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