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"Chinese Lockdowns Trigger Panic Across Local
Supermarkets As Food Supply Chain Breakdowns Intensify"
by Epic Economist
"One thing that we all have definitely learned over the past two years is that things are never calm on the global supply chain. At this point, many were expecting conditions to be returning to normal, but after the latest wave of disruptions, most industry executives believe that this chaos will continue for many years to come. There are so many issues out of the control of those that own and operate the system that a recovery seems very unlikely. In fact, given the extreme congestion currently hitting some of the world’s key ports, we’re being warned that a supply chain disaster and the following collapse of our food systems are now unfolding and will reach crisis levels over the next six months.
After a month of strict lockdown restrictions, Shanghai, China’s most populous city, and home to the world’s largest port, is finally starting to reopen its factories. Last Friday, the Shanghai Commission of Economy and Information Technology, the city’s industrial development authority, announced that the operations of nearly 700 companies, mostly in industries making critical goods, would come back online today. Even though some might think that China reopening factories can help ease supply chain bottlenecks, experts are alerting that “a mad rush of production resumption” will actually make disruption worse, Right now, over 20% of the world’s container ships are currently stuck in congestion across crowded ports worldwide. From those, at least 30% of the global fleet is stuck in China, according to a report from shipping analytics company Windward.
This means trouble to U.S. supply chains, particularly when considering that ports on the West Coast like Los Angeles and Long Beach, handle more incoming cargo from China than any other facilities in the country. On the East Coast, the outlook isn’t any better. “We’re planning for this to go for the entire year,” revealed James McKenna, president of the Pacific Maritime Association. And although restrictions are easing in Shanghai, another lockdown is looming in Beijing, and it threatens to impact food supply chains the hardest. On social media, residents are describing that the new panic-buying wave is leaving empty shelves across a number of supermarkets.
Virus outbreaks, lockdowns, and other unpredictable catastrophes are driving supply chain risks significantly higher for businesses, as noted by Andreas Berger, the Chief Executive Officer of Corporate Solutions at Swiss Re.Data compiled by Swiss Re’s Institute in the latest sigma report showed that catastrophe events in 2021 drove total economic losses of $270 billion and insured losses of $111 billion, the fourth-highest since 1970.
In the U.S., mysterious factory fires are causing catastrophic damages to food production nationwide. This month alone, five facilities have suddenly caught fire leaving authorities scrambling to discover the cause of the incidents. This weekend, an "unidentified small plane" has crashed into the General Mills plant in Covington, Georgia, emergency officials have said. The facility produced several varieties of cereal and snack products and employed several hundred staff. Thankfully, no one was hurt, but production was interrupted indefinitely. Since the start of the year, similar cases have been reported in California, Kansas, Arizona, Arkansas, Wisconsin, Maine, Oregon, Texas, Louisiana, and Mississippi. Massive food shortages are coming for Americans, and if you don’t want to find yourself in the middle of a panic-buying frenzy, maybe you should start preparing for the worst right now."
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