Gabriel Felbermayr, director of the Institute for the World Economy (IfW) at Kiel University, said in an interview with Deutsche Telekom Online that the container crisis in China has led to disruptions in the global supply chain and that German consumers will soon feel the sharp price increases. “There are transport and delivery difficulties in Asia, and we will soon feel it in prices. In the coming months, many goods from the Far East will increase in price significantly, and we must be prepared for this.”
The Deutsche Welle 17 report quoted Fiebermeyer as saying that although it is difficult to accurately predict the overall price increase for a while, the increase will be close to 20 percent for goods in high demand such as televisions and game consoles.
The container crisis has not only caused prices to rise, but also caused shortages in the supply of certain goods. According to the latest issue of the German “Economic Weekly” revealed that IKEA furniture is planning to cut 5% of the European market in fiscal year 2022, 4% of the supply of the North American market, the reason is that “Asian logistics tight”.
The latest round of container crisis started in May this year at Yantian Port in Shenzhen. At that time, due to the outbreak of a small-scale “Delta” variant of the new crown epidemic in Guangdong Province, the authorities took strict measures to prevent and control the epidemic, many port workers were quarantined at home, resulting in Yantian Port’s throughput capacity was once cut in half. As a result, a large number of cargo ships could not enter the port, and numerous containers were piled up in the port and could not be shipped out. Parts, machinery, and raw materials needed by Chinese factories could not arrive in time, and computers, cell phones, and coffee machines made in Chinese factories could not be shipped.
Although after a few weeks, most of the preventive measures were lifted and the port resumed normal operations, the backlog of containers could not be sorted out for a while.
Deutsche Welle reported that the backlog of containers at Yantian port was, in fact, “the last straw that broke the camel’s back”. The whole crisis started last fall: China, which was the first to have the outbreak, was also the first to have it under control, so that while factories in other countries had to shut down for epidemic prevention, only Chinese factories were operating at full capacity, leading to a surge in Chinese export trade and a record export surplus. This “only out” situation, soon caused a shortage of containers on the Chinese market, China to Europe and the United States shipping prices have also doubled more than ten times. Although many foreign traders to take the “empty box back to ship” and other emergency measures, but still can not ease the situation.
A German business people who do not want to be named, said the container crisis from the fall of 2020, is likely to stretch to 2022.
Germany’s Kiel University Institute of World Economics director Fibbermeyer pointed out that in addition to the container crisis, China, the U.S. economy is now recovering rapidly, also caused by many goods and materials supply tension. “But in general, the global economy has been seriously affected by the logistics crisis. China’s container crisis is very serious.”
Fiebermeyer warned that this year’s European Christmas sales season is also likely to be hit by this container crisis, because many goods are produced in China, and the production cycle of Christmas season goods is often months long. “Due to tight shipping capacity, this December, many European stores are likely to have emptier shelves than in previous years.”