The last year has been a very complex one for multinational companies that have import or export activities in their value chain. First it was supply that halted, due to the sudden closure of the Chinese market in late Q1 2020. Then it was demand, as advanced and emerging economies around the world started closing their borders to prevent Covid 19 from spreading. This chain of events left a lot of factories and traders with excess inventories and no one to sell to.
In a great demonstration of adaptability, the world learned to live with Pandemic challenges and supply chains were reinstated. In some sectors such as Home Improvement and Healthcare, sales actually toped those of 2019, but this behaviour posed new challenges for factories and retailers around the world:
- Sea freight has suffered of deep shortages due to lack of ships and containers in otherwise very common routes. A containerized freight from China´s main ports in December 2020 reached as high as four time its September 2020 value.
- Rise in commodity ores and petrochemical sub-products due to lack of mining and refining in 2020 is causing terminated metal and plastic producers to increase prices, which in turn is then transferred to the end consumer.
These events have created a sense of urgency for SMEs in emerging markets, making it a priority in the past Quarter to secure supply and freight availability in spite of price, thus the effects of Covid 19 in international supply chains are far from over. Learn how Melenco can help you source raw materials and secure supply, as well as manage your logistics to make sure your products boards the ship you planned for.