Supply chain issue update
Bloomberg News reported that the city of Chengdu in China has locked down its 21 million residents due to a COVID Zero government policy.
- Manufacturers impacted by this include:
- Volkswagon
- Volvo
- Foxconn (aka Hon Hai Precision, supplier to Apple)
- Shenzhen, China remains under movement controls due to COVID-19 spread
- 33 cities in China have been fully or partially locked down in current outbreak, affecting 65 million residents
- Yahoo News is reporting that shipping rates are declining as 'unprecedented' boom has peaked
- Ocean shipping rates on major trade routes have fallen by more than half since the beginning of this year
- Data from Freightos shows the cost to ship a 40-feet container from China to the U.S. West Coast is around $4,300, down almost 72% from mid-January.
- In comparison, a container shipped from Asia to Europe costs around $7,800, 40% less than at the start of the year
- New ships will be deployed over the next two years, as shipping groups have “invested heavily” in container fleet growth after profits soared in recent years.
- Freight rates from China to the U.S and Europe both rose north of $20,000 last September due to supply-chain disruptions, port backlogs, and a surge in cargo.