29 Ekim 2021

Covid-19 continues to have devastating effects on all foreign trade and supply chains globally. The chains that supply the raw materials and intermediate products they use in their products from the Far East feel these effects very intensely. On the other hand, Covid-19 is seriously changing the demand for products and services in all markets. The most important difference between the disruptions caused by the pandemic and the disruptions caused by other crises is that they are large, fast and disruptive throughout all supply chains in terms of supply and demand.

The Annoying Background of Foreign Trade: Deadlines
The survey conducted by the Institute for Supply Management shows that there is a significant increase in the lead times of the products supplied from China and the capacity utilization in the facilities that produce in China has decreased to 50 percent. It turns out that 44 percent of supply chains do not have any plans regarding their supply from China due to Covid-19. Another reason supply chains are affected is severe shipping delays between China and at ports. In China, which has an important place as a raw material or finished product in the supply chains established today, factory closures were made between January 23, 2020 and April 8, 2020. The effects of this can continue to be very dimensional. Since the beginning of the Covid-19 epidemic, all production processes in China have been seriously disrupted, and supply chains all over the world have not been able to supply the intermediate and final products they need. In addition, previously planned capacity increase and quality improvement projects were also delayed due to the inability of foreign experts to travel to China, as reported by the Financial Times. We cannot see the effects of these disruptions in the supply side as a production loss of only 76 days. It is unlikely that the production loss due to Covid-19 can be replaced by overtime or similar practices, because maintenance of production systems, resumption of normal production, capacity increase projects could not be realized. In addition, land, sea, rail and air transport systems, which are one of the important components in product supply due to Covid-19, started to operate with very low capacity only in June 2020. The effects of this deterioration in the supply side will be felt throughout 2020 and even in the first half of 2021.