COVID’s Delta Comeback Slams World’s Supply Chains

Global supply chains, especially in Asia, are taking a beating from the new surge of COVID-19 infections caused by the delta variant, Bloomberg reported.

Just as manufacturing geared for the Christmas shopping season is set to ramp up, the ports and factories hit the hardest by the delta variant are in locations that had done a good job fighting off the first global COVID surge, according to Bloomberg.

“Delta is likely to significantly disrupt trade in Asia,” Deborah Elms, executive director of Asia Trade Centre in Singapore reportedly told Bloomberg. “Most of the markets have been fortunate in managing COVID well so far. But as COVID continues to spread, this lucky streak is likely to end for many locations.”

The regions taking the hardest COVID-19 hit right now are the sources of goods, such as electronics, that are disproportionately consumed in advanced countries such as the United States, Bloomberg reported.

“Things are getting worse and worse as most factories in southern provinces had to stop operations, and companies in the north have been struggling to maintain some production,” Pham Hong Viet, chairman and CEO of a Vietnamese manufacturing company, reportedly told Bloomberg. “The country’s entire supply chain has been seriously disrupted.”

COVID-19’s renewed threat to global logistics comes as shipping companies also are dealing with the effects of natural disasters — particularly floods — in Germany and China.

Read more: Delta Variant, Natural Disasters Strain Global Supply Chains

Part of the problem for companies that engage in global trade is that even those businesses able to find space in shipping containers are confronting a major increase in prices. The Drewry World Container Index, published by England’s Drewry Shipping Consultants Ltd., put the price of shipping a 40-foot container from an average port in the East to an average port in the West at $9,421 as of Aug. 12, up from about $2,050 in August 2020.