Port operators warn the global supply chain crisis is here to stay
Dubai’s DP World Chairman and CEO Sultan Ahmed Bin Sulayem expects the current bottlenecks in the global supply chain to last until 2023, with higher costs for shipping goods on the horizon. Port operators across the globe are saying that supply chains are struggling to keep up with demand amid disruptions due to the pandemic, lockdowns, and quarantine measures.
Sulayem’s DP World is one of the largest ports and cargo handlers in the world with hubs across many continents. According to him, manufacturers are being delayed “by as much as three years”, with China being the main source of the problem. The world’s largest shipping firm, A.P. Moller-Maersk also noted that bottlenecks could last longer than expected.
This comes after last week’s events, in which many industry groups representing truck drivers, shipping and airline workers issued warnings saying governments need to improve freedom of movement relating to trade. They said a “global transport system collapse” could happen due to the strain on workers.
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McDonald’s announces plans to have net zero emissions by 2050
American fast food giant McDonald’s has unveiled plans to cut global greenhouse gas emissions to net zero across the business by 2050. Around 80% of the company’s total emissions come from the supply chain, with their use of proteins such as beef and chicken, with dairy products also contributing to the figures.
As well as this announcement, McDonald’s has said that they will be working with the nonprofit Science Based Targets initiative (SBTi) to develop their environmental targets. For now, the company will be using new guidelines from the organization to focus on cutting emissions in agriculture, land use and forestry to try to lower emissions by a third by 2030.
McDonald’s has commented, saying “we’re trying to send a signal to our partners, suppliers, other brands in the global community and policymakers” that they are committed to achieving this environmental goal. More than 1,000 other large companies have pledged similar targets.
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Supply chain issues stop sportswear brands in their tracks
Top American sportswear brands Under Armour and Nike are facing supply chain disruptions as factories across Vietnam were forced to close due to another outbreak of Covid-19. The second wave of the pandemic in Southeast Asia has prompted large companies to warn their consumers about the effects on the supply of goods.
The pandemic has caused numerous problems in manufacturing, with Nike having to deal with 10 weeks of lost production due to strict government regulations meaning factories had to close. This disruption is set to cause major supply and financial problems for Nike, who heavily depend on Asian factories, as 75% of its footwear is produced in Vietnam and Indonesia alone.
The sportswear giant will be implementing price increases to offset the transport costs required to move their goods through the supply chain. The Asian factories are hoped to resume production in the coming weeks, but according to Nike’s Chief Financial Officer Matthew Friend, it will take “several months” for the company to bounce back to full capacity.
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