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Floods in China, Europe to further disrupt already-stifled shipping industry

Heavy floods in parts of western Europe have severely disrupted cargo including railway links. This would not only disrupt the supply chain but have a severe spillover effect on sectors such as the motor industry and domestic appliances.

July 27, 2021 / 03:46 PM IST

The floods in China and Europe have added to the woes of the shipping industry which was already struggling to cope with the rise in demand for containers amid a rebound in economic activity in developed countries after the second wave of COVID.

Heavy floods in parts of western Europe have severely disrupted cargo including railway links. This would not only disrupt the supply chain but have a severe spillover effect on sectors such as the motor industry, domestic appliances.

The shipping industry has had a rough 2021. First, the industry took a hit after one of the world’s largest container ships became wedged in the Suez Canal in April, halting traffic for nearly a week. The waterway is one of the busiest in the world, with about 12 percent of trade passing through it. Then,  increased spending in the midst of economic recovery in some parts of the world led to a shortfall of containers, creating delays and driving up prices.

Also, the disruption caused by the flooding in the Chinese province of Henan is made worse by the fact that the province is landlocked.

The floods in Henan will severely impact the distribution of wheat and coal, as it is considered the 'bread basket' of China, having produced 38 million tons of wheat this summer.
Moneycontrol News
first published: Jul 27, 2021 03:42 pm

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