Thought supply chain Groundhog Day was over? It looks like ship’s about to get really real. Captain of the Ever Given - the 220,000 tonne container ship the length of the Eiffel Tower that got beached as, bro in the Suez Canal last March - may have regretted not pulling a sickie before deciding to board. 😷 But despite his stuff-of-legends six-day grounding - costing an estimated US$400 million every hour and delaying nearly 30% of global container traffic - it didn’t stop a fellow Evergreen captain from following in his wake last week, grounding the 334 metre Ever Forward in Chesapeake Bay, Virginia. While the ship may be stuck for ‘quite some time’, adding to US port backlogs, it may only be the tip of the global supply chain iceberg.
The world’s already weathering stormy waters with the war in Ukraine. Now Shenzhen, China’s tech manufacturing powerhouse, has ordered around 17 million residents into lockdown to battle their record Covid outbreak. Something the author of Supply Chain Management for Dummies, Professor Daniel Stanton, reckons is ‘going to be really bad’. Shenzhen’s adjacent port Yantian, which processes around 90% of China’s electronic shipments on ships holding 20,000 containers, is being affected by Covid measures. 🚢 Probably time for impacted companies to reach deep into their bag of tricks to reach solutions… eh, Ford?
Why? Last year Apple (AAPL) reported supply chain woes cost them US$6 billion in sales, and last Monday, one of Apple’s top iPhone manufacturers located in Shenzhen, Foxconn, shut their factory doors. 🏭 Tencent (TME), the company that owns Chinese messaging app WeChat and is now facing anti-money laundering inquiries, is also based in the tech capital. But it’s not just shipping Apples out that’s a problem. Shenzhen’s electronics factories need all the right components shipped in, too. And shipping hold-ups are likely to put the squeeze on electric vehicle and battery cell manufacturing too. Makes McDonald’s running out of milkshakes last year seem like the good ol’ days. Slurp slurp.🥤