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Global supply chains shatter as coronavirus variant and disasters strike

A new worldwide wave of COVID-19. Natural disasters in China and Germany. A cyber attack targeting key South African ports.

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Global supply chains shatter as coronavirus variant and disasters strike
Global supply chains shatter as coronavirus variant and disasters strike

Events have conspired to drive global supply chains towards breaking point, threatening the fragile flow of raw materials, parts and consumer goods, according to companies, economists and shipping specialists.

The Delta variant of the coronavirus has devastated parts of Asia and prompted many nations to cut off land access for sailors. That's left captains unable to rotate weary crews and about 100,000 seafarers stranded at sea beyond their stints in a flashback to 2020 and the height of lockdowns.

"We're no longer on the cusp of a second crew change crisis, we're in one," Guy Platten, secretary general of the International Chamber of Shipping, told Reuters.

"This is a perilous moment for global supply chains."

Given ships transport around 90% of the world's trade, the crew crisis is disrupting the supply of everything from oil and iron ore to food and electronics.

German container line Hapag Lloyd described the situation as "extremely challenging".

"Vessel capacity is very tight, empty containers are scarce and the operational situation at certain ports and terminals is not really improving," it said. "We expect this to last probably into the fourth quarter – but it is very difficult to predict."

Meanwhile, deadly floods in economic giants China and Germany have further ruptured global supply lines that had yet to recover from the first wave of the pandemic, compromising trillions of dollars of economic activity that rely on them.

The Chinese flooding is curtailing the transport of coal from mining regions such as Inner Mongolia and Shanxi, the state planner says, just as power plants need fuel to meet peak summer demand.

In Germany, road transportation of goods has slowed significantly. In the week of July 11, as the disaster unfolded, the volume of late shipments rose by 15% from the week before, according to data from supply-chain tracking platform FourKites.

Nick Klein, VP for sales and marketing in the Midwest with Taiwan freight and logistics company OEC Group, said companies were scrambling to free goods stacked up in Asia and in U.S. ports due to a confluence of crises.

"It's not going to clear up until March," Klein said.

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Manufacturing industries are reeling.

Automakers, for example, are again being forced to stop production because of disruptions caused by COVID-19 outbreaks. Toyota Motor Corp said this week it had to halt operations at plants in Thailand and Japan because they couldn't get parts.

Stellantis temporarily suspended production at a factory in the U.K. because a large number of workers had to isolate to halt the spread of the virus.

The industry has already been hit hard by a global shortage of semiconductors this year, mainly from Asian suppliers. Earlier this year, the auto industry consensus was that the chip supply crunch would ease in the second half of 2021 - but now some senior executives say it will continue into 2022.

An executive at a South Korea auto parts maker, which supplies Ford, Chrysler and Rivian, said raw materials costs for steel which was used in all their products had surged partly due to higher freight costs.

"When factoring in rising steel and shipping prices, it is costing about 10% more for us to make our products," the executive told Reuters, declining to be named due to the sensitivity of the matter.

"Although we are trying to keep our costs low, it has been very challenging. It's just not rising raw materials costs, but also container shipping prices have skyrocketed."

Europe's biggest home appliances maker, Electrolux, warned this week of worsening component supply problems, which have hampered production. Domino's Pizza said the supply-chain disruptions were affecting the delivery of equipment needed to build stores.

US AND CHINA STRUGGLE

Buckling supply chains are hitting the United States and China, the world's economic motors that together account for more 40% of global economic output. This could lead to a slowdown in the global economy, along with rising prices for all manner of goods and raw materials.

US data out Friday dovetailed with a growing view that growth will slow in the last half of the year after a booming second quarter fueled by early success in vaccination efforts.

"Short-term capacity issues remain a concern, constraining output in many manufacturing and service sector companies while simultaneously pushing prices higher as demand exceeds supply," said Chris Williamson, chief business economist at IHS Markit.

The firm's "flash" reading of U.S. activity slid to a four-month low this month as businesses battle shortages of raw materials and labor, which are fanning inflation.

It's an unwelcome conundrum for the U.S. Federal Reserve, which meets next week just six weeks after dropping its reference to the coronavirus as a weight on the economy.

The Delta variant, already forcing other central banks to consider retooling their policies, is fanning a new rise in U.S. cases, and inflation is running well above expectations.

'WE NEED TO SUPPLY STORES'

Ports across the globe are suffering the kinds of logjams not seen in decades, according to industry players.

The China Port and Harbour Association said on Wednesday that freight capacity continued to be tight.

"Southeast Asia, India and other regions' manufacturing industry are impacted by a rebound of the epidemic, prompting some orders to flow to China," it added.

Union Pacific, one of two major railroad operators that carry freight from U.S. West Coast ports inland, imposed a seven-day suspension of cargo shipments last weekend, including consumer goods, to a Chicago hub where trucks pick up the goods.

The effort, which aims to ease "significant congestion" in Chicago, will put pressure on ports in Los Angeles, Long Beach, Oakland and Tacoma, specialists said.

A cyber attack hit South African container ports in Cape Town and Durban this week, adding further disruptions at the terminals.

If all that were not enough, in Britain the official health app has told hundreds of thousands of workers to isolate following contact with someone with COVID-19 - leading to supermarkets warning of a short supply and some petrol stations closing.

Richard Walker, managing director of supermarket group Iceland Foods, turned to Twitter to urge people not to panic buy.

"We need to be able to supply stores, stock shelves and deliver food," he wrote.

SOURCE: REUTERS

Faisal Ali Ghumman is a senior editor at GNN, known for writing top quality content which garner very high readerships and has been covering every field of journalism, including politics, media, sports and scholarly articles. Faisal Ali Ghumman is nothing less than a Veteran Editor and has been writing for GNN for the past 3 months.

Entertainment

BTS takes over UNGA, performs ‘Permission to Dance’ inside assembly hall

BTS’ speech was followed by a pre-recorded performance of their latest song ‘Permission to Dance’ which in itself is a message of positivity and hoping for an end to the pandemic.

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BTS takes over UNGA, performs ‘Permission to Dance’ inside assembly hall

New York: Acclaimed K-POP band BTS addressed the United Nations General Assembly (UNGA) as the special presidential envoy for future generations and culture from their native South Korea— expressing their faith in young people's ability to imagine a better world despite pandemic.

They spoke about climate change, and sustainable development amid the pandemic. The band discussed the difficulties that the youth encountered as a result of the pandemic.

The group leader Kim Namjoon (RM) taking centrestage, began in Korean, “It is an honor to be here today, where BTS has been appointed as Special Presidential Envoy for The Republic of Korea. We’re here today to share the stories of a future generation. Before we came here, we asked the young people in their teens and 20s around the world about their past two years and about the world they find themselves in today".

BTS’ speech was followed by a pre-recorded performance of their latest song ‘Permission to Dance’ which in itself is a message of positivity and hoping for an end to the pandemic.

The artists took turns on stage during their seven-minute speech, but it wasn't all about UN goals. 

The pre-recorded video was presented soon after all members of the band- Jimin, J-Hope, Jin, Suga, RM, Jungkook, and V- spoke about the possibilities of the future generation and their ability to adapt to changing times amid a raging coronavirus pandemic.

Korean President Moon Jae-in, at the conclusion of his speech in session, introduced the seven band members as the ‘World's most loved artist’.

The UNICEF tweeted, “Today, BTS returned to #UNGA to share a powerful message on climate action, COVID-19 vaccines & the importance of taking care of ourselves and our communities. Thank you, @BTS_twt for inspiring a generation of young people. Together, we can create a better world. #BTSLoveMyself".

It is pertinent to mention here that BTS began their ‘Love Myself campaign’ with UNICEF in 2017, and it was the subject of RM's first UN speech, which he gave in English.

The band virtually attended the 75th Assembly. It took place last year and offered its message through a film that brought people comfort.

This time, the band members took turns speaking in Korean, which was simultaneously dubbed in English.

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Pakistan

'COVID fourth wave': Pakistan reports 3,689 cases, 83 deaths

Islamabad: Pakistan is presently experiencing the fourth wave of coronavirus which is said to be deadlier and more contagious than previous three COVID waves.

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'COVID fourth wave': Pakistan reports 3,689 cases, 83 deaths

According to National Command and Operations Center (NCOC), around 3,689 cases of coronavirus were reported while 83 people succumbed to the disease in the last 24 hours, taking the total death toll to 26,580.

The total number of cases has reached 1,197,887.

As many as 1,079,867 patients have recovered from the disease with 5,383 critical cases.

Punjab                

The number of patients swelled to 410,463 in the province with 12,171 causalities.

Sindh

The number of infections has surged to 442,401 in the province, while the death toll has reached 7,089.

Khyber Pakhtunkhwa

The confirmed cases have surged to 167,154 in the province with 5,200 casualties.

Balochistan

There are 32,517 confirmed cases while 342 patients have died from the infection so far.

AJK and Gilgit-Baltistan

There are 33,131 coronavirus cases in the AJK while the death toll has reached 715. On the other hand, there are 10,127 cases in GB with 179 coronavirus deaths.

Islamabad

There are 102,094 cases in the capital city while 884 people have lost their lives.

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Pakistan

Pakistan's COVID-19 positivity rate drops to 4.22%

Pakistan is presently experiencing the fourth wave of coronavirus which is said to be deadlier and more contagious than previous three COVID waves.

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Pakistan's COVID-19 positivity rate drops to 4.22%

Islamabad: Pakistan's coronavirus positivity ratio decreased to 4.22% from more than 11% a couple of weeks ago.

Pakistan is presently experiencing the fourth wave of coronavirus which is said to be deadlier and more contagious than previous three COVID waves.

According to National Command and Operations Center (NCOC), around 2,167 cases of coronavirus were reported while 40 people succumbed to the disease in the last 24 hours, taking the total death toll to 27,246. The daily Covid-19 positivity rate in Pakistan is at 4.22%.

The total number of cases has reached 1,226,008.

As many as 1,135,038 patients have recovered from the disease with 4,840 critical cases.

Punjab             

The number of patients swelled to 422,790 in the province with 12,407 causalities.

Sindh

The number of infections has surged to 450,787 in the province, while the death toll has reached 7,270.

Khyber Pakhtunkhwa

The confirmed cases have surged to 171,388 in the province with 5,412 casualties.

Balochistan

There are 32,769 confirmed cases while 344 patients have died from the infection so far.

AJK and Gilgit-Baltistan

There are 33,787 coronavirus cases in the AJK while the death toll has reached 729. On the other hand, there are 10,245 cases in GB with 182 coronavirus deaths.

Islamabad

There are 104,242 cases in the capital city while 902 people have lost their lives

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