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Market Analysis on Global Supply Chain Crisis and its impact on U.S Markets

by Global Market Research Analyst

What Is A Global Supply Chain Crisis?

The global supply chain crisis fundamentally is the demand and supply mismatch. In this context, it is a result of the release of the huge volume of pent-up demand as economies are recovering from the ills of the pandemic which is not being met by the supply. The global supply chain crisis caused a worldwide shortage of goods and commodities as well as drastically affected the consumer pattern of consumption. The crisis also takes into account, the disruption of supply chains across the globe and how maritime trade was impacted. 

Causes Of Global Supply Chain Crisis And Its Impact On U.S Markets

The global supply chain crisis is caused not by a single event in isolation, rather it is a result of an amalgamation of different factors put together. Primarily, the factor that had the largest effect on the global supply chain crisis is the pandemic. It was the first die that toppled in a stack of dominoes resulting in a chain reaction that is closely interrelated and interconnected.

The pandemic resulted in an abrupt fall in demand for goods and commodities in emerging and developing economies. The above consequently resulted in a glut in the market and producers were left with no option other than to discard the surplus primary produce. This adversely affected the producer confidence and the producers treaded on a cautious path and anticipated a significantly lower inventory for the next period.

Secondly, the global supply chain crisis was deeply aggravated by the 2021 Suez Canal blockage. In March 2021, the Suez Canal, one of the busiest global maritime routes, was blocked by the Ever Given, a 20,000 TEU container vessel. The blockage resulted in shipping delays of everyday goods and commodities for consumers across the world including the U.S. It was estimated that the value of goods delayed each hour due to the blockage stood at $400 million.

The shortage also had spillover effects and negative externalities onto already existing disrupted supply chains of certain goods and commodities which exacerbated the situation even further. For example, the semiconductors and integrated circuits supply chain was disrupted due to an array of factors and the blockage further aggravated the supply chain. The semiconductors and integrated circuits are integral for key industries like automobiles and electronics. Major American producers like Ford, General Motors and Apple had to undergo a constrained optimization of production given the circumstances of less than adequate reserves of integrated circuits and semiconductors. This has put the global supply chain at a risk for semiconductors and integrated circuits.

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Read the full blog here: - https://globalmarketdatabase.com/market-analysis-on-global-supply-chain-crisis-and-its-impact-on-u-s-markets/


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About Global Market Advanced   Research Analyst

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Joined APSense since, May 14th, 2021, From New York, United States.

Created on Oct 29th 2021 04:05. Viewed 195 times.

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