Epic port congestion lacking computer chip. And there is a huge shortage of truck drivers. The world’s fragile supply chains are under extreme stress.
A supply chain nightmare is driving up prices for consumers and slowing the global economic recovery from COVID-19. Unfortunately, Moody’s Analytics warns that supply chain disruptions “will get worse before they get better.”
“As the global economic recovery continues to gather steam, what is becoming increasingly clear is how it will be impacted by the supply-chain disruptions now visible around every corner,” Moody’s wrote on Monday. report good.
In fact, the IMF Downgraded its 2021 growth forecast for the United States By one percentage point on Tuesday, the highest for any G7 economy. The IMF cited supply chain disruptions and weak consumption – partly driven by supply chain constraints such as a lack of new cars to buy amid computer chip shortages.
“Border controls and mobility restrictions, unavailability of a global vaccine pass, and stuck-at-home demand have combined for a perfect storm where global production will be disrupted as deliveries are not made on time, costs and prices will rise, and As a result, GDP growth around the world will not be as strong,” Moody’s wrote in the report.
Moody’s said the “weakest link” may be a shortage of truck drivers – an issue that has contributed to overcrowding at ports and drying up gas stations in the United Kingdom.
Unfortunately, Moody’s warned that there are “dark clouds ahead” as a number of factors make overcoming the supply chain particularly challenging.
First, the firm pointed to differences in how countries are fighting Covid, with China aiming for zero cases and the United States “prepared to live with Covid-19 as an endemic disease.”
“This presents a serious challenge to the harmonization of the rules and regulations by which transportation workers move in and out of ports and hubs around the world,” Moody’s wrote.
Secondly, Moody’s cited how there is “no concerted global effort to ensure the smooth operation of logistics and transportation networks” around the world.
Others are more optimistic on the supply chain outlook.
JPMorgan Chase CEO Jamie Dimon said on Monday that these supply chain bottlenecks will soon be removed.
“It won’t be an issue at all next year,” Dimon said during a news conference organized by the Institute of International Finance, CNBC told. “That’s the worst part of it. I think the great market system will adjust to it like companies.”
Credit : edition.cnn.com