Smartphones, cars, home appliances: where does the worsening world supply crisis come from?

The factories being held, port closures, the rising price of transportation … the circuits on which companies around the world rely on the manufacture of everyday consumer products, and to send them to us, is dangerously jammed.

I ordered the Clio Inten S at the beginning of the summer. I would have accepted in the fall. And the garage told me it wouldn’t be available for at least two months! This client, who was interviewed by Ouest France in early September 2021, not only had to wait longer than usual to have his vehicle returned. The sector is currently affected by a global supply crisis that is making deliveries difficult. And this is far from alone. High-tech, toys, furniture… manufacturers in various sectors are looking at the coming months with concern.

“There will be toys under the tree”, Franck Mathais, the spokesman of the Joué Club, points out to France Bleu, but “ not everyone may be available when customers want to buy them. ” At Ikea France, one in five products is out of stock today. And around the world, companies are reporting similar difficulties.

China is being forced to shut down its factories

What caused this chaos? The reasons are many – and that’s why the situation is worrying. The latest is the energy crisis China is currently experiencing, forcing it to shut down some of its factories. Rising coal prices and the weather in the summer of 2021 have exacerbated the situation in the country: the demand for air conditioning is higher than expected, and the production of hydroelectric dams is lower. To combat climate change, China has, moreover, set emission reduction targets for its regions and reprimanded, this summer, those not on the nails, underline Les Echos. To correct the situation, some regions have therefore implemented new restrictions.

As a result, China currently does not have enough electricity to meet the needs of individuals and businesses. In some areas, air conditioning is restricted, as are mall and street lighting hours. And many industries (steel mills, textile factories, etc.) are idle. This is particularly the case for suppliers in groups like Apple and Tesla, who sometimes have to stop production within a few days.

The cost of transportation of goods is rising

However, other factors have already sown chaos in the circuits of manufacturing and distribution of everyday products. The turmoil caused by the famous freighter Ever Given on the Suez Canal in March 2021 and the temporary closure of several ports (notably the large port of Yantian in China) added to the difficulties in delivering the products. And since the pandemic began, the price of freight transportation has exploded. The price to be paid to rent a 40-foot container has thus increased by 650%, BFMTV said.

The emergence of clusters in some areas in Asia, which are not adequately supplied with the vaccine against covid-19, has also led to the temporary closure of some factories. Added to this very difficult situation is the shortage of semiconductors that told you last June, and unfortunately still prevails. The closures that need to be put in place in producing countries have significantly reduced the production of semiconductors. These components are now used on many everyday devices: from our smartphones to our cars, through our game consoles and our connected household appliances. With graphics cards, the shortage is particularly felt, as cryptocurrency miners buy them in bulk.

All of these factors combined lead to real supply difficulties, which translate into delays in deliveries in the best cases, and shortages in the worst. And it’s a safe bet that the situation will worsen in the coming months: the end of the year celebration is approaching, and the peak of consumption with it.

Leave a Comment