Global flood disasters are followed by global delivery bottlenecks
Thresholds undermined by the floods no longer give the rails any support. (Photo: Baloncici/ Shutterstock)
Shipowners speak of a “low blow” for global supply chains. Thyssenkrupp is one of the first industrial companies to announce that it will no longer receive any raw materials.
The global movement of goods does not come to rest: First a container ship is blocking the Suez Canal, then ports in southern China fail due to increased Covid cases, now flood areas in western Europe and China are blocking traffic. Tim Huxley reported about it CEO of Mandarin Shipping, the news broadcaster CNBC.
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Always new bad news
“A week rarely goes by without something new,” said the head of a large container ship operator based in Hong Kong. At first it was a shortage of containers that led to delays and price hikes. In April, the wreck of the giant container ship Ever Given halted the global flow of goods. Now further adversity threatens: Heavy rain and floods in Western Europe and China again interrupt transport routes.
European rail transport routes disrupted
Huxley says of the effects: “It will disrupt the supply chain because the rail connections are all interrupted.” As an example, he cites lines from the Czech Republic and Slovakia that lead to the ports in Rotterdam and Hamburg. The loading and unloading of the freight is also delayed. “That will really mess up the industry,” he is sure. He refers to the steel producer Thyssenkrupp, who wrote to customers on July 16 “Force majeure” proclaimed have. The company said it would not get any raw materials due to the flooding. The warning also states that, thanks to the natural disaster, he cannot be called to contractual penalties. One reason is the damage to the railway lines in Hagen: There whole parts of the route are “missing”.
The failure at Thyssenkrupp will affect many industries, according to Huxley. He mentions the automotive industry and manufacturers of household appliances as examples. The vehicle manufacturers recently had to struggle with production losses due to the global shortage of chips, VW, for example, slowed production.
Floods in China
The Chinese province of Henan is also hit by floods. The core problem here is that the region is thereby cut off from the mainland. This particularly restricts the supply of wheat and coal. Huxley points out that Henan is the “bread basket of China” with an annual wheat production of 38 million tons. The disrupted rail traffic in turn has an impact on commercial shipping. “That will of course (…) drive up freight rates,” said the manager.
