Frachtbox team

The Waiting Crisis in the Container


Published 18 Jun 2022

The Waiting Crisis in the Container

Container crisis

We wanted to bring up an issue that we mentioned before. Let's see if there are any developments and how this situation affected the countries.

 

The Waiting Crisis in the Container

I want to start by saying China because it is home to the world's largest port, Shanghai. Let's see what happened after our last article. As you know, the new Covid-19 cases in Shanghai caused this city to go into total closure.

This situation will bring up the world trade, which is in the recovery process again after the pandemic, and the logistics problems that started with the container crisis. Large companies produce in this region and the final products are distributed to the world from here. Most companies at the rate of 80 percent do their trade by sea, that is, using containers. China, which is the world's largest exporting country, leads the way in this trade. Naturally, with the onset of covid, world trade, namely the sea route, and therefore the Container crisis emerged.

 

So what happened to other countries?

I would like to share as follows:

1. The Russia-Ukraine war started.

2. Excessive increase in oil prices.

3. Tesla Automobile production stopped.

4. Asia's largest chip manufacturer SMIC has stopped production.

5. Pegatron, the manufacturer of Apple's phones known as Iphones, announced that they have temporarily stopped their production.

6. Apple MacBook manufacturer Quanta has temporarily suspended production.

7.iPad manufacturer Compal Electronics also suspended its activities in China.

 

After the decision of the American automobile manufacturer Tesla and China's largest chip manufacturer International Semiconductor Manufacturing Company SMIC to stop their production due to covid measures, the Shanghai administration, 666 companies, including Tesla and SMIC, to prevent production in the manufacturing sector due to closure measures. Added it to the "white list". Thus, the factories on the white list were able to return to work. However, due to the measures, manufacturers cannot answer the questions of how they will procure raw materials and parts, and how they can put on the market what they can produce.

 

While talking about a global crisis, it is obvious that the situation is not encouraging for China. The Road Vehicles Freight Flow Index, which shows the volume of truck and truck traffic on the roads, decreased by 22.4 percent in the first week of April for Shanghai compared to the same period of the previous year. Transport volume decreased by 69.7 percent in quarantined Shanghai and 86.7 percent in Jilin province. According to data from the China Transport and Purchasing Federation, freight transport costs increased by 30 percent at the beginning of April compared to last year, due to reduced capacity and longer transport times. According to the report prepared by economist Song Ching from the Chinese University of Hong Kong, it is estimated that the city's income will decrease by 61 percent and its total national income by 8.6 percent due to the logistical barriers caused by the one-month closure in Shanghai and the increase in operating costs.

 

This new danger that China has entered has begun to find a response in the financial markets as well. Many banks have already begun to revise China's economic growth figures. The supply chain in China, the world's manufacturing base, is in a state of severe exhaustion. The emergence of a scenario similar to the pandemic process has opened up the possibility of potential new pressure on the global economy and inflation. Is there any possibility? Yes, But whether it will be as harsh as the first one is debatable. Because there are some intermediate methods developed with learned and purchased risk levels. In other words, I think the aftershock will not be as severe as the earthquake itself. In addition, the formation of such a picture on the pandemic and the Ukraine-Russia War; means that the world will try to hold on to life with high blood pressure (inflation) for a while.



source: https://kriterdergi.com/dosya-enerjide-donusum/cinin-sifir-vaka-politikasi-ile-yepyeni-bir-kuresel-darbogaz-mi-geliyor