IndustryWeek – Supply Chain: Shifting Winds to Watch for in the 2nd Half of 2022
July 7, 2022
Ambrose Conroy, Seraph's founder and CEO, was featured in IndustryWeek.
In the second quarter of 2022, there have been both brand-new disruptions and ongoing ones. The world is still in upheaval, and these five persistent trends will have an influence on global manufacturing and force the majority of corporations to reengineer their supply chains.
1. Following the anticipated post-Olympic COVID lockdowns, China is reopening its cities
With each new opening, China is getting closer to recovery. However, the zero-COVID policy still poses a considerable and unabated risk of additional economic closures. China's attempts to relax COVID limits in Shanghai and Beijing are indicators of progress and hope. The lengthy shutdowns of Shanghai and Beijing had a huge effect on global supply networks as well as domestic industries in China. China continues to lead the world in manufacturing, but as companies switch from using huge Center of Excellence factories to a more spread production model, we are seeing more and more indicators of regionalization and localization. The official zero-COVID policy is causing extra disruptions in global production, supply chains, and logistics when China is hit by the subsequent COVID wave.
2. The global shipping crisis has returned
The Chinese economy will pick up speed quickly. We will experience increasing port congestion in Q3, first in China and subsequently in the Americas and Europe, as Chinese manufacturing picks up speed. Shipping costs will increase once more, and the loss of the rail connection between China and Europe related to the conflict in Ukraine will make matters more difficult. More than a million additional containers must be transported from China to Europe via sea routes, placing further strain on an already overburdened and damaged sea freight system.
Although there is little that can be done to prepare, the ports in China, Europe, and North America, which were already seeing high volumes, will be severely impacted by this next shipping bubble. Both shipping costs and delivery times will rise. We anticipate that the current global shipping problem will last through 2022.
Check out Ambrose's FULL article from IndustryWeek: www.shorturl.at/ENZ78