Why Do Problems Continue in the Global Supply Chain?

The problems in the global supply chain continue unabated and do not normalize over time. This is due to parameters that exist and maintain the complex distortions in the specific area of economy and trade, reaching the limits of its operation with several chances of fragmentation and collapse.

The reasons for the problems

Two years of continuous and repeated economic shutdowns around the world due to the Covid-19 pandemic, have caused huge problems for workers in this sector of the supply chain and transport. Globally, the industry employs 65 million people and includes the International Maritime Chamber, the International Air Transport Association (IATA), the International Road Transport Association (IRU) and the International Transport Workers’ Federation (ITF).

Collapse of the supply and transport chain due to poor working conditions of workers will increase their inaction resulting in worsening shortages of basic goods such as food, fuel, medicines, and so on.

The Mix of Problems

Repeated lockdowns, with severe border restrictions, factory closures with if not a total reduction of at least a drastic reduction in production, cause congestion at borders, in ports, delays in fares and an increase in shipping costs on all world lands, sea and air commercial routes respectively.

The labor shortage in the transport sector increases the pressure on existing workers, creating in the long run excessive fatique on them, resulting in a continuous decline in the quality of their services.

An example of this situation is

  • 400,000 sailors remained on board for at least 12 to 18 consecutive months in addition to the schedules set out in their original contracts. Crew changes are a major challenge due to aviation problems.
  • Mass cancellations of flights with the result that their employees are faced with requirements, restrictions and so on.
  • The mistreatment of workers in the supply and transport sectors will lead many of them to look for work in other sectors of the economy, directly increasing the shortage of workers in these sectors, gradually leading them to fragmentation and collapse.
  • Mandatory quarantines on arrival in their countries of origin for both airline and shipping workers force them to spend 15 days of their vacation locked in a hotel before seeing their families.

All this will have to be resolved by increasing vaccinations of these workers but also by increasing the recruitment of workers in the suffering sectors of supply and transport.

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TRUST ECONOMICS

Trust Economics is a specialized independent economic research, analysis and consultancy business. Our team provides ingenious analysis in the macro & micro economic field, in the field of financial market, regional and sectoral analysis equally, forecasts, consultancy, specialized studies-research/projects from its headquarters in Athens, Greece.

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