The global shipping industry is facing another test. This time, it came as natural disasters in Europe and China. The sector has already seen massive disruptions this year, including a worldwide container shortage, the Suez Canal blockage, and the suspension of China’s eastern ports, which have created shipping delays and jacked up freight rates.
Torrential rains led to floods that devastated parts of Germany, Switzerland, Belgium, Luxembourg, and the Netherlands. Market participants said the floods had paralysed railways and disrupted supply chains. Railways connecting German ports to the Czech Republic and Slovakia have all been broken, the sources said, adding that it would “really” disrupt the industry.
German steel giant Thyssenkrupp declared force majeure on July 16 as it could not receive raw materials due to the flooding. Market participants said tight steel supply would have a knock-on effect on industries such as construction, automobile, home appliances, and others.
Floods also disrupted transportation in the central Chinese province of Henan. The province's capital Zhengzhou is an industrial and transport hub where China’s east-west and north-south high-speed rail lines meet. Henan is also China’s major wheat-producing region, with 38 million tons of production this summer. The National Development and Reform Commission (NDRC) said last week that the transport of coal from Shanxi and Inner Mongolia via Zhengzhou to eastern and central provinces was “severely impacted.”
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Published on July 27, 2021 3:37 PM (GMT+8)Last Updated on July 27, 2021 3:37 PM (GMT+8)
