The global supply chain has been disrupted throughout the COVID-19 pandemic. You must be thinking: “what does this have to do with packaging?” In addition to the challenges from the pandemic, China’s energy crisis has crippled this system even further. Keep reading to learn more!
What’s Happening in China
In 2020, Chinese President Xi Jinping announced plans to reduce carbon emissions by 2030. China mainly uses coal as a source of energy. Late in 2020, China stopped buying coal from Australia, a large producer of imported thermal coal.
A decreased coal supply and rising demand put even more strain on the system. The demand was not just coming from the manufacturing and construction sectors, but consumers as well! Fuel prices overall went up in 2020, and they still haven’t stopped rising.
Despite this, Chinese energy regulators did not increase consumer power prices. There was also an implicit ban on raising coal prices, meaning that Chinese coal producers couldn’t charge the same amount that others were able to. This led to coal companies selling their stockpiles rather than purchasing more coal. Those stockpiles are now running low, and production is falling behind.
Amidst all this, China tried to rely more on renewable energy sources to achieve their climate goals. Those efforts were hindered by extreme weather that affected hydropower and wind energy. Power rationing is now in effect for factories and some other businesses. Some factories have even had to stop production for a few days a week!
The energy crisis and the global supply chain
In a previous blog post, we noted that North American ports were congested due to limited ground crew. In addition to this, there is also a shortage of shipping containers. Now you might be asking: “if there aren’t enough shipping containers, why don’t they just make more?”
The answer is simple: they already are, but it’s still not enough. According to Quartz, three Chinese manufacturers are responsible for producing 80% of the world’s shipping containers. Paired with China’s energy crisis, container production is experiencing the same slowdown that the rest of the supply chain has.
The global supply chain is already under massive strain from COVID-19. Some freight vessels in California have been floating at sea for days because of a worker shortage.
How does this impact my packaging?
Here at LeKAC Sourcing, we use two main shipping methods: air and vessel. Ordinarily, packaging shipped via sea vessel takes 6-8 weeks to arrive at its final destination. However, because of issues in the global supply chain, vessel shipping times have increased to approximately 12-16 weeks.
It’s important to note that this 12-16 week timeframe does not account for factors like closures caused by COVID-19 or holidays. For example, if you need your packaging in March or April, it would be best to order your packaging in November!
To learn more about potential shipping delays and how some holidays affect lead times, check out this blog post! We always do our best to keep in contact with our suppliers, so if any delays occur, we’ll be the first to let you know!
Need your packaging a little sooner? You’ve got options!
For an additional charge, air shipping is another shipment option we offer. For those who need packaging in a rush, this option is ideal since it avoids the congestion at the ports!
We also work with local suppliers, with a product list that’s always expanding! Since they don’t require global shipping, they avoid some of the possible delays that would affect the global supply chain. If you’re interested, you can ask your LeKAC consultant for more information!
Overall, the best way to make sure you get your packaging on time is to order early. If you’re not sure when you’ll need your packaging by, contact us as soon as possible! Our packaging specialists can help you calculate when to place your order and give insight about any possible delays.
Want to work with LeKAC, but don’t need packaging? Check out our services page to see what other services we offer!