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China’s water shortages are having a massive impact in electrical power generation, and the nation’s hydroelectric and coal power producers are facing severe hardships due to irregular water access. Chinese officials have responded to the widespread power outages by cutting down on industrial energy consumption, and as a consequence, the nation’s manufacturers are facing another series of disruptions.
That’s where things get tricky for America’s supply chains. The United States imports huge quantities of manufactured goods from China, including 70 percent of Walmart’s store merchandise, and 40 percent of all the clothing items sold around the country. China is also the main producer of key industrial products that we use to finish our domestic construction projects, such as steel, aluminum and
All of this is resulting in the aggravation of the global container shortage and pushing shipping costs to levels never seen before in all history. Michelle Bockmann, the markets editor for Lloyd’s List, warned that supply costs are spiraling “out of control” due to the latest port closures. Bockmann revealed that spot rates for transporting a single container have rocketed by 366 percent in the past year while longer-term shipping contract rates shot up up by 465 percent.
Andrew Goodacre, the Chief Executive for the British Independent Retailers Association echoed Bockmann’s comments and alerted that costs will be passed onto U.S. consumers.“The inflation in the supply chain is much higher than the consumer inflation you are seeing at 5 percent,” Goodacre pointed out, outlining that the situation is becoming unsustainable and that businesses are likely to pass on a higher share of those increased shipping costs to consumers.
2022 will definitely be difficult year. With the economy slumping, markets crashing, and supply chains breaking apart, we should all brace for some serious challenges in the months ahead. Our country is rapidly collapsing into chaos, and all factors are aligning to change the course of our history.
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