Flint Group Reports Enduring Disruptive Challenges Within Global Supply Chains

Suppliers to the print industry continue to see major disruptions to their supply chains, resulting in further increases in lead times and cost pressures. Due to these intensifying difficulties, raw material pricing is being increased on a monthly basis as suppliers to the ink manufacturing industry continue to pass on the cost increases they are faced with.
 
Global port congestion continues to impact booking space and availability on steam ship routes, with excess of 400 vessels waiting to enter ports, representing 10% of global vessel capacity, of which 48% are in Asia, and a further 24% in North America.
 
Container capacity has increased on all major shipping routes. However, this has done little to reduce congestion. Even with extra capacity, the carriers are struggling to maintain scheduled departures. The limiting factor is not shipping capacity, but rather how many containers the ports and hinterland connections can manage.
 
Vijay Patel, global supply chain director for both Flint Group’s CPS and FOPS divisions, stated that “inland logistics continues to be severely impacted by labor and equipment shortages, to the extent that consumers are now feeling the impact on everyday goods. Forwarders are persistently adjusting fuel surcharges to cover the increases they are facing, with some applying surcharge increases fortnightly.
 
“Brent crude oil has almost doubled in the last 12 months,” Patel added. “The price per barrel has risen from $42.85 to a current high of $82.56. The WTI has mirrored this trend rising from $39.43 to $78.93 over the same period.”
 
Global demand for crude tall oil (CTO) is increasing rapidly due to its use in producing biodiesel. With current demand exceeding supply, prices have increased by a further 65% in the last 12 months.
 
“There seems to be no end in sight to the ongoing issues, as we are now also faced with China’s energy crisis, which is widely being reported as shaping up to be the latest shock to global supply chains” concluded Patel. “The issue is a combination of local governments ordering power cuts in an attempt to avoid missing targets for reducing energy and emissions output, while some are facing an actual lack of electricity.”
 
Factories situated in the world’s largest exporter of goods are being forced to curb production in an attempt to conserve energy. More than half of China’s mainland provinces are now limiting electricity consumption to such an extent that Chinese manufacturers in the economic powerhouses of Jiangsu, Zhejiang and Guangdong provinces (which together account for almost a third of the nation’s gross domestic product) are warning that the strict measures to cut electricity use will severely reduce output and possibly drive up prices even further.
 
2020 was an extremely challenging year; however, 2021 and the outlook for 2022 will be just as challenging, if not more, as we continue to face global supply chain issues, ongoing cost increases in fuel and raw materials, coupled with China’s energy crisis.