Holiday shopping shortages fueled by energy crises, Vietnam shutdowns

Supply chains everywhere have been hit by massive disruptions this year, from container shortages to floods and Covid infections setting off port closures.

The energy crises in mainland China and Europe are the latest to roil shipping.

Capital Economics noted that the number of ships waiting outside Chinese ports have jumped again in recent weeks, calling it “concerning.” According to the research firm, the 7-day average for the number of ships as of Sept. 30 was 206, compared with an average of 82 ships for 2019, before the pandemic.

Julian Evans-Pritchard, senior China economist at the research firm, said that power rationing along the supply chain could be interfering with ports’ ability to ship orders.

Factory shutdowns in Vietnam, where many firms moved manufacturing to amid the U.S.-China trade dispute, have also affected the production of many goods.

Here’s a look at how recent developments have once again snarled shipping and what types of goods are affected in the leadup to the year-end holiday shopping season.

The power crunch in China has caused widespread disruptions as local authorities ordered power cuts at many factories. Europe is also grappling with a massive gas shortage.

What’s happening in both regions is a perfect storm that’s disrupting supply chains globally, industry watchers and analysts say.

Factories in China and Europe have temporarily shuttered or at least reduced output because of the energy crisis. More than 60 companies in China have suffered power-related disruptions so far, and the list is likely to grow, says Jena Santoro of Everstream Analytics.

The biggest impact will be felt by consumers in the form of higher prices as inflated energy prices will cascade into increased manufacturing costs, said Dawn Tiura, president of the Sourcing Industry Group.

What goods are being hit:

1. Food

Rising energy prices in Europe will have a “serious cascading effect” on the region’s food supply chains, says Tiura.

“Major fertilizer plants were forced to curtail output because of the rising costs, and now farmers can’t produce enough food as a result,” she explained.

2. Carbonated beverages, dry ice, packaged foods

The pressure on fertilizer will also lead to a shortage of one “very interesting by-product” – carbon dioxide – which is used in a wide range of consumer products, says Per Hong, senior partner at consulting firm Kearney.

“With curtailed fertilizer production, we almost certainly will be faced with a global shortage of CO2 that is used widely. CO2 is used extensively in the food value chain from inside packaged food to keep it fresher longer, for dry ice to keep frozen food cold during delivery, to giving carbonated beverages (like soda and beer) their bubbles,” he said.

That points to the vulnerability of global food supply chains, Hong said.

3. Apple iPhones, electronics, toys

Several major Apple suppliers have suspended operations at their factories in China, according to Hong. In fact, the…