Following the lockdown, many companies are desperately trying to replenish their stocks in the face of ongoing bottlenecks in the supply chain. According to a study by Euler Hermes, hoarding is currently not uncommon in global trade. The USA is currently ahead in the race for goods.
In the year to date, global trade has recovered faster and more strongly than expected, particularly in terms of the value of traded goods and services. This is likely to continue for 2021 as a whole and The volume of goods and services traded increased by a whopping 7.7 per cent. (2020: -8 %), while the value even increased by +15.9 % (2020: -9.9 %). This is the conclusion of the current study Ship me, if you can of the credit insurer Euler Hermes.
„The predicted catch-up boom after the lockdown has long since begun, and companies are desperately trying to replenish their stocks. However, this is currently not a sure-fire success: in view of the ongoing bottlenecks in the supply chain, particularly for the shipping containers themselves, and the longest delays in a decade prices and thus the costs of global trade are rising at a gallop to new record highs. Hoarding is currently the order of the day in global trade. However, the USA is clearly ahead in the race for goods - partly due to the earlier reopening.“ Ron van het Hof, CEO of Euler Hermes in Germany, Austria and Switzerland
Europe and Germany lagging behind
The collapse in supply and demand was the main driver behind the collapse in global trade in 2020. However, the normalisation of supply and demand conditions only accounts for around 15 per cent of this year's increase in the value of traded goods and services - the Increase in inventories by around 50 per cent. The shortage of shipping capacity and the associated high prices also account for around 35 per cent of the increase.
Euler Hermes also expects bottlenecks in 2022
"Shipping capacity is likely to remain scarce in the short term“, says Van het Hof. „In addition to the very uneven regional upturn, the reasons for this are the insufficient investments in maritime shipping in recent years. The fact that there are few alternatives to sea freight and that new capacities can only be put into operation slowly is also not helping to ease the situation quickly. It usually takes a year and a half to build a new ship, which means that bottlenecks and consequently high freight rates are likely to continue in 2022.“
Price and capacity pressure is therefore likely to continue in 2022, although it is expected to peak in 2021. Expected lower tariffs will not be able to offset the price pressure and trade costs will remain high in 2022. Overall, the credit insurer's economists expect the following for 2022 Above-average growth in global trade once again of +6.2 per cent in volume and +8.4 per cent in value.
USA at the front of the race compared to Europe
US companies are currently at the front of the queue in the race for goods: Deliveries of goods from Asia to the USA are currently increasing by around 30 per cent, to Europe are only about 10 per cent more due to the much later opening. After the supply disruptions in 2020, this is the second shock to global supply chains in a short space of time.
„Most European countries, especially Germany, are currently struggling to replenish their already low stock levels,“ says Van het Hof. „Supply chain disruptions are therefore still the order of the day in 2021 - although many companies have already introduced numerous measures to stabilise their supply chains in the past year. It is definitely time to tackle the issue, because further shocks to the supply chains are also expected in the coming years. Companies therefore have it in their own hands to be among the winners.“
Stabilising supply chains
In 2020, 94 per cent of the employees Euler Hermes According to the study on supply chain disruptions, the companies surveyed in Germany, the USA, the UK, France and Italy had to cope with temporary disruptions to their supply chains (Germany 95 %), with one in five companies even experiencing serious disruptions (Germany 16 %). More than half (52 %) had already taken measures to make their supply chain more robust for the future. Re-shoring was also discussed in some cases - however only around 10 to 15 per cent of companies actually bring their production back to Germany.
„Supply chains can break, regardless of whether they are global or local,“ says Van het Hof. „The coronavirus pandemic has shown that - but so has the current flood disaster, which also disrupted supply chains in our own country. There is never a guarantee of a robust supply chain - ultimately, it's more about having contingency plans in place for various scenarios so that you can act quickly and flexibly. In addition The quality of relationships with our own suppliers is likely to play an increasingly important role in the future, regardless of where they are based geographically. A partnership-based relationship with suppliers is more likely to pay off in the long term than squeezing every last cent out of them in supply agreements.“
SourceEuler Hermes
