Gamal Abdel Nasser must be able to give himself a smile. Eighty-five years after the nationalization of the Suez Canal in 1966 by the late Egyptian President following the invasions of the United Kingdom, France and Israel, the waterway has retained a sub-par position in global trade.
Crude oil prices have risen, tankers and carrier ships have been backed up, and suppliers of everything from oil to televisions are thinking about shipping their cargo around the Cape of Good Hope, likely adding a week to shipping times, as well as significant additional costs. On Friday, rescuers were still desperately trying to remove the 220,000-tonne given to Ever, but warned it could take weeks to recover.
A century and a half after the canal was completed in 1869, more than 10 percent of the world’s maritime trade and the same amount of crude oil crossed 120 miles of waterway, connecting an emerging Asia with rich Europe.
The Suez Accident, which carries an estimated 6 9.6 billion worth of goods a day, according to Lloyd’s List Inherent fragility Strictly Expanded global supply chain At a time when they are already being plagued by epidemics and philosophically deadly for ages Global trade infrastructure Being challenged.
The strains created by the Covid-19 are accompanied by its initial ugly scramble due to the initial lack of protective equipment and limited vaccine supply. Revealed problems in the global trade system. These problems could push the government and business together to reconsider the supply-chain model over time, which has drastically reduced the efficiency of the system due to its resilience.
Ted Mabley, a supply chain consultant at Detroit’s Polarix Partner, said: “The industry’s supply chain is a few miles long, but only an inch deep.
‘No Skills Left’
With the crisis looming large a year ago, the global trade system has held up well during the epidemic in a variety of ways. “If you look at what’s really happening on purpose, you’ll see that the supply chains have become quite resilient,” he says. Engoji Okonjo-Iwala, Director General of the World Trade Organization.
This is partly, thanks to Adam Tuge, a professor of history at Columbia University, thank you 1.6 m Marine Corps, Many of whom “finally sat on the sea for a few months.”
This is thanks to companies like Amazon and Alibaba and delivery models honored by a complex network of shipping, ulol and logistics companies.
Yet there are strains everywhere. Barriers to the Suez Canal follow a cascade of events that have jeopardized the smooth running of global trade. Ever paid just five days before the run, a A fire at the Renaissance electronics chip factory in northern Japan Threats of further obstruction a The semiconductor industry is already plagued by crisis.
The shutdown is expected to last at least a month after forcing rival NXP and Germany’s Infinion Close their chip manufacturing plant in Austin, Texas They were recently reopened for a month after a massive blackout in the U.S. state due to the Arctic eruption.
A quarter of Texas petrochemical production was also dumped in the same refrigerator, affecting the supply of polythene, polypropylene and polyvinyl chloride, which were three important polymers. As a result motorists have been hit, desperate to deliver airbags and other components.
“Unfortunately, the fire occurred at a time when there was no power left over the entire industry,” said Hidetoshi Shibata, chief executive of Renaissance, referring to an accident that revived memories of the 2011 earthquake and tsunami in Japan. Since then, declining production of the previously obscure plant has shut down car factory trials in remote areas of the U.S. This time, Shibata has warned of another potential “massive impact” on global chip supplies.
The epidemic was already showing weaknesses in the global supply chain. Three times higher than the container shipping rate Companies that control shipping lines have taken power in anticipation of declining demand. It now costs about 4 4,000 to carry a 40-foot container between East Asia and the U.S. west coast, rising to 1, 1,500 by early 2020.
“Our supply chain is based on predictable circumstances,” said Ashwani Gupta, Nishan’s chief operating officer. “What we didn’t anticipate is an unprecedented crisis like the Covid-19 and the ultimate challenge to the unique challenge we face.”
As if all this was not enough, Political pressure is pushing against globalization And the long and twisted supply chains that it includes.
“Global supply chains face three different pressures, which are worth thinking about,” said Nagayar Woods, a professor of global economic administration at Oxford University.
The second, published by Covid-19, is the strategic reliance on other countries for medical equipment and is more broadly based on basic products and basic military and civilian technologies. “It’s more about national resilience: ‘We need to make sure we can produce our own food, our own PPE, our own vaccines, and so on.’ It’s a kind of protectionist argument that I think is not just a nationalist argument, “Woods said.
The third is that companies have led investors and consumers to demand, businesses have better control over their supply chain, companies have resorted to policing carbon emissions or labor practices of distant suppliers due to additional costs.
Elasticity and extension
And yet, despite these pressures, the truth about world trade – and globalization, is that its death has been repeatedly exaggerated.
“Some people say we’re moving from globalization to ‘sloblization,'” said Okonzo-Aiwala. “But I don’t really think so. What I think is that we’re going through a period of globalization.”
In the 1990s and early 200s, global trade output rates doubled as large economies such as China, India, and Eastern Europe were integrated into the global economy. Okonzo-Aiwala says that now that they have been more or less exploited, things are slowly coming to a halt.
“I think we should look at the fact that there are some regions of the world that have not really been integrated. Africa is only 2-3 per cent of world trade 2-3 so there is a lot of opportunity to integrate African and other poor countries into the system, ”he said.
Parag Khanna, founder and managing partner of strategic consulting firm Futuremap, argues that far from being published as fragile, global supply chains have repeatedly demonstrated their ability to respond to temporary disruptions and structural changes.
He has proven to the energy industry that the supply chain is now more, not less, stronger. When Saddam Hussein invaded Kuwait in 1990, oil prices doubled in two months. What will not happen today, he said, is “since supply has expanded, supply is global, there is communication in the market, flexibility of refining to handle different types of oil terminals and refineries and different classes of oil”.
The Internet is perhaps the ultimate example of what he calls “an executive,” allowing millions of people to travel to meet digital networks first.
When a crisis hits, manufacturers go to great lengths to rescue production. After a fire at a Michigan factory in 2018 that made parts for trucks for Ford’s F-150 pick-up, carmakers sent a team to a smoldering plant to extract equipment for those parts. The 19 machines, which weighed 44 tons, were operated in Ohio, and then the Russian-built Antonov cargo jet arrived in the United Kingdom, where production resumed. The whole operation takes 30 hours.
The complexity of the networks that bring products to their store or doorstep is hard for their customers to realize. John Butler, president of the World Shipping Council, said: “I’m not sure end users care about the details except they don’t work.
Khanna says these complications mean that the brash political discussions about reconstruction operations are innocent ive “even the supply chain has a supply chain,” he says.
According to the agency, a single dose of the Bioentech / Pfizer vaccine, for example, requires 260 ingredients from multiple countries. What Okonzo-Aiwala says is “just sitting at home from time to time” is what is being imagined. It looks hard.
Still, writes historian Mark Levinson Box Some subtle tunes can be made about the revolution of shipping through container vessels. “I point to the need for resilience in terms of the reliability of the value chain,” he says. “I think it’s like buying an insurance policy.”
Such questions may be on the minds of Dutch and Japanese rescue teams They fight to displace the container ship Now one of the most important commercial arteries in the world is blocking.
Capt. Karan Veer Bhatia, who is currently awaiting coronavirus test results in Egypt and is being repatriated to India, as well as anyone involved in the operation of huge ships at sea, understands the pressure. Last year, he dumped his tanker into a lock on the Panama Canal, another trade chokepoint. Although it was not an international event, Bhatia had to stay awake for 36 hours. “It’s a stressful job for the captain and the crew,” he says. “It’s not a car, it’s a 230-meter floating island.”
Due to the Covid-related border restrictions, Bhatia has been stranded on her ship for 10 months, an estimated 40,000 seafarers stranded at sea last summer, exceeding their contract. Half of this number is uninterrupted by the sea today.
“People don’t understand anything about this shadow sector,” he said, referring to the “on shore,” global shipping trade and how billions of Landlover customers have reached their favorite products.