Dire warnings from International Monetary Fund . . .
Anxieties over supply chain issues, primarily triggered by the pandemic, have reached a fever pitch across the Pacific region and within Asia. Renewed COVID-19 outbreaks, electricity shortages, and global shipping backlogs have caused a slowdown in China’s manufacturing sector in recent months. And economists attribute a larger than expected shrinking of the Japanese economy in the third quarter to supply disruptions, which forced manufacturers like car makers to cut production. The International Monetary Fund warned last month that ongoing pandemic and supply chain risks would cut Asia’s 2021 economic growth. Bucking the trend, some Southeast Asian countries, notably Vietnam and Malaysia, have seen a faster than expected manufacturing recovery, which could bode well for resolving larger supply chain bottlenecks.
The nuts and bolts of moving goods . . .
Persistent challenges in shipping and trucking are contributing to the intractability of current supply woes. Ports worldwide, but particularly around the Pacific, are dealing with considerable congestion and associated challenges. For instance, numerous container vessels waiting off the port of Singapore have reportedly been fined by the Indonesian navy for illegally anchoring in Indonesian waters while waiting days or even weeks to enter Singapore. Indonesia denies the fines. Meanwhile, ongoing coal shortages in China have led to restrictions on urea exports to South Korea and India, with truckers and farmers in those countries waiting in long lines for the compound essential to fertilizers and feed supplements. The rising price of diesel globally has also impacted truck drivers across Asia and has triggered trucking strikes in Bangladesh, Indonesia, and Thailand over the past two months.
Supply chain congestion also a Canadian challenge . . .
The Canadian economy has suffered weakened economic growth and a dip in manufacturing sales, due in part to the global supply chain crisis. Experts advise Canadians to conduct holiday shopping early and prepare for shortages and price hikes. Some warn that supply chains could remain disrupted globally into 2023. Prime Minister Trudeau has cited the current supply chain issues in promoting a free trade agreement with ASEAN, for which negotiations are ongoing. Still, supply chain issues are not the only short-term problem facing imports into Canada. Last Wednesday, Public Services and Procurement Canada said it has paused imports of medical gloves from a Malaysian manufacturer while it awaits an investigation into alleged forced labour. This follows several supermarkets pulling tomato products from shelves after a CBC investigation into alleged connections to potential forced labour in Xinjiang, China.
READ MORE
