If it’s not one thing these days, it’s another. In the shipping industry, we’ve had to face COVID-19 issues for more than a year now, which have had a major impact on supply chain. Then, we had to contend with port congestion and a lack of shipping containers. Now, after seeing a light at the end of the tunnel, that tunnel is filling with water. Flooding in Europe and China is leading some analysts and industry experts to forecast a huge delay leading into back to school and holiday shopping. And with that delay, higher prices on goods are expected as well.
Industry Update: Flooding Has Caused Major Infrastructure Issues
This summer, rains caused flash floods in the Phoenix area. But we weren’t the only ones who received more rain than expected. Western Europe and China are bearing the brunt of the global flooding issues. Water has damaged railroads, facilities, machinery, and warehouses across the supply chain.
This time, it’s not just the ports that are managing shipping delays. In the case of the rain damage, we’re seeing a huge backlog in production, which is affecting the supply chain in a big way.
The Situation: Production Is Delayed around the Globe
While the lack of shipping containers and restrictions associated with the pandemic directly affected ports, this flooding issue is farther reaching. Manufacturers across Germany, the Netherlands, Luxembourg, and Belgium are feeling the strain. Many of them produce parts for auto manufacturing, technology, and aerospace. In China, copper production has been affected, and copper is used in a variety of applications, including electronics.
Experts predict that the effects of the flooding damage will be present in the supply chain for weeks or even months. All of this as we head into the busy holiday shopping season.
Projection: The Impact of Flooding Could Expand to Other Areas
The Henan province in China, hardest hit by the rains, is a hub of rail transportation. Because of the damage to the railroads, coal—which powers most of the country—has not been able to be delivered in a timely manner. That means plant closures and additional delays.
But there’s another issue here, in addition to manufacturing. Henan’s 200,000 acres of farmland were affected by the rains. Their biggest exports include peanuts and pigs. In previous years, heavy rain led to disease among pigs, and that could certainly occur again. There’s already going to be a pork shortage in California, so this is another blow to the industry.
For the moment, the world is in limbo as we determine what will happen with the global supply chain. And of course, when the supply chain is affected, so is the shipping industry.
Recommendations
As the world becomes more and more flat, what happens in one region affects us all. Whether your company relies on a component manufactured in one of the flooded areas, or you need to ship products to and from Western Europe and China, your business could be affected by this latest issue.
That’s why, more than ever, it’s imperative to have a freight forwarder on your team to advocate on your behalf.
That’s what we do at Cyclone Shipping.
We stay informed so we know about everything that’s happening, from container demands and shipping costs to global flooding. Contact us to develop your strategy and keep your shipments moving.
