Supply Chain Update
We are all seeing and hearing an assortment of stories related to Asian importing as well as speculation of what the future holds. Ongoing Challenges with Global Procurement continue as we head into Mid-October of 2021. As our industry navigates its way through multiple issues related to Shipping product from Asia, the news from China has not improved.
- Large demand to replenish product inventory
- Backlogs in US Ports
- Shortages of equipment such as containers and chassis.
- Shortage of dockworkers and truck drivers plaguing the movement of goods in the USA
- Chinese productivity and factory output curtailed by widespread electricity rationing due to an energy crisis.
- China facing blackouts and a power shortage affecting as many as 20 provinces.
- Chinese Northeastern provinces, where power shortages have been more severe limiting factories supply causing ceased operations anywhere from a few days to a month (Provinces where foodservice disposables, gloves and related products are produced)
The Chinese power shortages can be attributed to several causes which vary across the country. Shortage of Coal reserves and high cost of coal seems to be leading the challenges. According to Chinese Government statements, restrictions have been put in place to meet Carbon neutral goals set by 2026. Estimates put 70% of China’s power production as reliant on coal fired generation with no immediate relief of shortages in sight.
Not all bad news
RJ Schinner continues to work with our suppliers to address the current challenges; looking for alternate shipping solutions, other avenues to gain access to equipment through business alliances and encouraging suppliers to negotiate with their local governments to “keep the lights on” and limit the number of days they are without power in the upcoming months. We expect to see challenges continue into the early part of next year with another wave of focus by businesses to replenish inventory after the holiday season. We will continue to work towards solutions into 2022.
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For More Information Check Out the Links Below:
ANCHORS AWAIT! Is your stuff on this ship? – BY JANE WELLS, Wells Street
When will supply chains be back to normal? And how did things get so bad? BY JON HEALEY, SAMANTHA MASUNAGA, Los Angeles Times
Why There are Now So Many Shortages (It’s Not COVID) – Video© Copyright 2021 Tim Scott, Senior VP Purchasing & Corporate Strategy RJ Schinner Company, All rights Reserved. Written For: DSR Sales Support Blog