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COVID-19 likely to continue affecting global supply chain

COVID-19 likely to continue affecting global supply chain
COVID-19 is likely to continue affecting the global economy for the foreseeable future, according to some economists.

COLUMBUS, Ind. – The world’s global supply, manufacturing and transportation sectors should prepare for continued COVID-19-related disruptions for the foreseeable future, according to a new report from Americas Commercial Transportation (ACT) Research Co.

“COVID risks have increased materially as the highly contagious Omicron variant continues its global sweep, and reports indicate growing strains on staffing across the US and global economies,” an ACT news release noted.

According to Kenny Vieth, ACT’s president and senior analyst, the world should be planning for a January of meaningful labor disruption, along with increased manufacturing challenges, both locally and globally.

“Low-cost manufacturing countries with low vaccination rates have had trouble in previous COVID waves,” Vieth said. “The Delta variant knocked Indian steel production off-line and disrupted automotive sub-assemblers in Southeast Asia. To combat Omicron, the Chinese government has instigated shelter-in-place quarantines, continuing their strict lockdown policy. As China remains the world’s workshop, Chinese parts suppliers and ports going off-line is a real short-term risk.”

Vieth continued, “Beyond the bad news, there is the silver lining that Omicron’s rates of serious infection and mortality are materially lower, especially for the vaccinated. And the Omicron has almost taken the more serious Delta variant off the map: On Dec. 10, there were 43 Omicron cases in the US. On Jan. 4, 95% of new US COVID case were the new variant.”

Regarding the impact to the North American commercial vehicle industry, Vieth said that despite broad-based demand strength, traction on commercial vehicle build has been elusive.

“The exception at year-end was better Classes 5-7 build rates related to the ability of the large pickup truck-based OEMs to move chips from smaller to larger GVW vehicles,” he said. “That allowed some additional incomplete units to be finished into year-end. With fewer components requiring semiconductors, trailer production also showed some modest traction into year-end, suggesting some easing in commodities capacity.”

He concluded, “It appears that the industry will begin 2022 with still unfinished 2021 units. At the levels we suspect, this is an unprecedented situation. If your company has parts on all those ‘built, but not built’ units, some adjustment will be required to align your 2021-22 output with reported and forecast data.”

ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer and bus industry data, market analysis and forecasts for the North America and China markets.

 

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The Trucker News Staff

The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.

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The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.
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