By Global supply chains are taking another hit, this time stemming from floods in China and Europe, according to a CNBC report.
The latest disruption comes on the heels of recent setbacks resulting from the surge of the COVID-19 Delta variant, natural disasters in Asia and Europe and a cyberattack in South Africa, as PYMNTS previously reported. The toll of the combined disruptive forces is reminiscent of 2020, experts have said.
In western Europe, heavy rains have caused severe flooding in Germany and Belgium, as well as portions of Switzerland, Luxembourg and the Netherlands. Severe floods have led to broken railway links, which has all but halted shipping. In China, shipping delays stemming from floods are worsened because the province of Henan is landlocked, according to a report.
The delay in global shipping impacts populations worldwide, in particular the small to medium-sized businesses (SMBs) that are now faced with not only longer turnarounds for shipping, but also rising costs for goods, according to a recent report. SMBs struggle for cargo space in the limited amounts available on ships from Asia, with companies having to pay roughly three times the going freight costs. The most recent disruptions will add to those rising costs.
Shipping delays have become commonplace in recent months. An uptick in consumer spending caused a shortage of containers, which created lags and increased prices, according to CNBC. In March, shipping traffic was stopped for almost an entire week after one of the world’s biggest container ships became lodged in the Suez Canal. According to a report, the canal accounts for about 12 percent of global trade. Approximately one million barrels of oil and about 8 percent of liquefied natural gas pass through the canal daily.
In June, an increase in COVID-19 cases in southern China caused lags at ports and contributed to skyrocketing shipping costs.
