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Global logistics Logjam shifts from Suez to Shenzhen

Hong Kong—As Western Economy Revives The next wave of the Covid-19 cluster in Asia, where the vaccination campaign is still in its early stages. It is creating new bottlenecks in the global supply chain. Threatened to push prices up and weighed. recovery after the epidemic

outbreak at one of the world’s busiest ports in southern China causing delays in global shipping Meanwhile, pivotal infections in the semiconductor supply chains in Taiwan and Malaysia exacerbate global chip shortages that hamper manufacturing in the automotive and technology industries.

New Headache Raises Inflation Concerns After China and the United States This week recorded the highest annual surge in factory and consumer prices respectively in more than a decade. If the problem continues—and gets worse—it could affect global growth.

Last year, for the most part, China, Taiwan and other parts of Asia continued to control the epidemic better than the United States and Europe. and limiting some economic damage But as vaccination rates rose in the West, governments began lifting restrictions. and the economy is recovering

Immunization efforts in Asia are lagging behind. And authorities have largely tightened border controls to contain the virus, yet Covid-1

9 has spread. Thailand has been hit hard in the past two months with the worst increase in new cases. While Vietnam, which is a manufacturing hub that is becoming more and more popular, Most of them avoid infection in the previous period. also suffered

Low vaccination rates across Asia could enforce social distancing rules and travel bans. This would hamper production and halt consumer spending.

“This is coming at a really fragile time. We are just starting to see a rebound in global trade,” said Nick Marro, chief global trade analyst at the Economist Intelligence Unit in Hong Kong.

A medical worker wearing protective clothing performs a COVID-19 test in Zhuhai, China, June 8.


China Daily/Reuters

at Yantian, a container port in the southern Chinese city of Shenzhen. Outbreaks among port workers disrupted traffic. This made the international shipping industry more stressful. which has to continually struggle with a shortage of empty containers. and obstacles throughout the week in Suez Canal earlier this year

Some ships had to wait up to two weeks to unload at Yantian. There are approximately 160,000 containers waiting to be loaded. quote from broker Prices for shipping 40ft containers to the US west coast It rose to $6,341, according to the Freightos Baltic Index, up 63% since the start of the year and more than three times the previous year’s price.

Yantian handled nearly 50 percent more cargo than the port of Los Angeles last year, the busiest container port in America. and in the first quarter of this year Container volumes increased 45% from the previous year. Activity at the port, which handles more than 13 million containers annually, is now at 30 percent of normal levels, and delays could persist for weeks, said Hua Joo Tan, a Singapore analyst with Liner Research Services.

Lars Mikael Jensen, network head at Danish shipping giant AP Moller-Maersk A/S, said the backlog at Shenzhen would have a global impact. This affects products sold at Walmart. Inc.

and Home Depot Inc.,

Companies that have established logistics bases around the port

“It’s a very big and bustling port. and when you get there late It will have a huge impact on global supply chains,” said Jensen, whose company is shifting 40 container ships from Yantian to other ports, including Hong Kong. It took a week and 10 days to clear the backlog, he said.

“There is no end in sight. The Chinese will shut everything down until they are sure that the coronavirus will not spread,” he said.

meanwhile Taiwan, which has one-fifth of the world’s chip production capacity, includes a significant portion of chips used in the automotive industry. are experiencing the COVID-19 outbreak. The worst since the epidemic

and King Yuan Electronics Co., Ltd.

One of the island’s largest chip and packaging testing companies. More than 200 employees were infected this month. As another 2,000 workers were quarantined, the company’s revenue fell by about a third this month.

meanwhile Other semiconductor companies In the immediate vicinity, they also experienced an outbreak in their workplace. According to officials in Taiwan’s Miaoli County in which the latest cluster has been concentrated

Taiwan Semiconductor Manufacturing Co., Ltd.

Only 92% of the world’s most sophisticated chips have yet to be affected. But the outbreak is happening beside its headquarters in Hsinchu City. Taiwan

Given the global scarcity in the chip industry, epidemic in Taiwan’s technology sector “It certainly… will make the shortage worse,” said Brady Wang, a semiconductor analyst at Counterpoint Research.

Malaysia, which is home to many foreign factories involved in chip manufacturing and the production of capacitors, resistors and other core modules. used in consumer electronics and automobiles Have seen the manufacturing activities of companies affected by the wave of COVID-19 cases.

Infineon Technologies AG

German semiconductor manufacturer with two factories in Malaysia. It was ordered by health authorities to close a factory earlier this month. This has caused some chip deliveries to be delayed. The company’s other factories around the world have high production capacity and are unable to cope with the problem. According to company spokesman Gregor Rodehueser.

After an employee was found infected with COVID-19 at another factory in Malaysia operated by Taiyo Yuden. Co., Ltd.

Japanese electronics and semiconductor manufacturer Extend the closing of the factory for another 10 days until Monday. as a precaution

A 1,300-foot container ship that blocked the Suez Canal for six days has been released and has begun moving north, Suez Canal Authority said Rory Jones of the WSJ described the rescue efforts and what will happen. Up next. Image: DPA/Zuma Press (video from 3/29/21).

all of the above The Malaysian Semiconductor Industry Association said the lockdown would reduce production between 15% and 40%.

“It will affect the supply chain wherever it is,” said Wong Siew Hai, chairman of the group.

The shortage of semiconductors has flooded small businesses. which felt the impact of slower deliveries and higher prices.

“I have three cars with electrical problems. and various parts The order was returned without a release date,” said Hector Martinez, who runs Rye Autocare in Rye, N.Y. “Everything related to electronic components came too late. Tires are in short supply and spare parts prices have increased by 20% over the past two months.”

A cargo ship was spotted near the Yantian port in Shenzhen, China, in May 2020.


Martin Pollard/Reuters

In addition to attacking companies in technology and automotive supply chain The disruption also affected China’s export sector. which is one of the strongest pillars of economic recovery. and increasing global inflation pressures.

Shen Jianguang, chief economist at online retail marketplace JD.com, said China has played a key role in suppressing global inflationary pressures. This is because most manufacturers are embracing the growth in production costs. Inc.’s

monetary unit in beijing But the latest port disruption risks higher global consumer prices.

The outbreak occurred in Guangdong, the birthplace of Shenzhen. which has the largest population of China which is responsible for about one-tenth of the country’s economic output. It has pushed some manufacturers to raise prices and even temporarily halt production to avoid further margin crashes.

“It’s pretty scary,” said Zhu Guojin, a consultant at logistics firm Jizhi Supply Chain Service Yiwu Co. “This is the first time we’ve seen a port capacity decline at such a level in China.”

As shipping prices to the United States skyrocket, Zhu said most of his customers, including Amazon.com. Inc.

Some American sellers and importers are paying.

“Last year, many customers delayed shipping in hopes of lower costs. But that’s not the case anymore,” Zhu said. “Most seem to not care about the price anymore.”

Government officials and some analysts have already mitigated the impact.

on thursday China’s Ministry of Commerce spokesman Gao Feng said Guangdong’s Covid-19 recovery has not had a significant impact on foreign trade. Among the province’s approximately 2,000 exporters More than half said the new orders were still higher compared to the year before.

Mr. Wang, a semiconductor analyst It is optimistic that the impact of the Taiwan outbreak on chip manufacturing will be minimal. by assuming that things It’s not much worse.

It is unclear when the stress will decrease. As many governments in Asia aim to eradicate all COVID-19 cases, even if it means short-term economic pain. The situation for the supply chain may get worse before it gets better.

“Right now the most important issue is to limit the epidemic in these specific companies and prevent it from spreading further,” said Patrick Chen, head of Taiwan research for brokerage CLSA. “If they can’t We will face more serious disruptions.”

Some companies may also benefit from a weak supply chain. Shares of several Chinese shipping companies, including Chinese state-owned company Cosco Shipping Holdings. Co., Ltd.

which is one of the largest shipping operators in the world It saw Hong Kong-listed shares rise as much as 14% on Thursday to their highest level in more than a decade. Hoping to increase container freight rates continuously.

write to Stella Yifan Xie at stella.xie@wsj.com, Costas Paris at costas.paris@wsj.com and Stephanie Yang at stephanie.yang@wsj.com.

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