Although supply chain markets in the Western world appear to be recovering, new threats in Asia-Pacific have worried some industry analysts amid a crisis that could cripple supply chains in the region. These threats include stubborn pandemic variants and a resurgence of hacking.
According to Thomas Cullen, an analyst at London-based consultancy Transport Intelligence (Ti), the latest issues are emerging in Southeast Asia, with Malaysia and Vietnam experiencing intense disruption due to anti-Covid measures.
He further observes that Malaysia is suffering from a major epidemic and that although ports and airports are functioning moderately well, much of the rest of the economy is affected.
“In particular, news articles have drawn attention to the semiconductor industry which is experiencing production disruptions due to quarantine of workers,” Cullen said.
“Vietnam is also experiencing an accelerating crisis with intense epidemics leading much of the country to enter various extremes of quarantine behavior leading to serious issues around port and airport operations.”
Ho Chi Minh City, which is a major maritime hub as well as a manufacturing center, appears to be in a state of near martial law with a curfew imposed by troops patrolling the streets.
âThe impact on freight transportation and supply chains is likely to be substantial,â Cullen says. âThe surge of goods imported from Vietnam since mid-2020 has been a significant part of the congestion seen in the United States, especially in the west coast ports, due to American consumers buying Vietnamese manufactured goods, such as furniture, in remarkable quantities. “
If this flow of goods is now to undergo further disruption, then it would be logical to assume that congestion and dysfunctions in areas such as container movements will worsen.
âThe danger is that COVID-19 will spread throughout the region and possibly in North Asian economies such as Japan and South Korea,â Cullen said. “This represents a further step in the crisis with the consequence that the dysfunction of the international logistics markets could increase.”
Add to those concerns the age-old threat of piracy, and Pacific Rim shippers may have reason to panic. Indeed, the Piracy Reporting Center (IMB PRC) of the International Maritime Bureau reports that the increase in crime in the seas of Southeast Asia was “inevitable”.
In addition to the COVID19-related challenges already faced by sailors, 2020 saw a year-over-year increase in global piracy, with a record 130 crew members kidnapped in the Gulf of Guinea, a trend in the continued rise in armed robberies against ships in the Singapore Strait.
The incidents recorded by the IMB PRC in 2020 are fairly evenly distributed between vessels at anchor and vessels underway.
Attacks on docked ships are even less frequent and only represent 7% of all incidents recorded in 2020.
While typical merchant ships, such as tankers, bulk carriers, container ships and general cargo ships were involved in more than 80% of all incidents recorded last year, IMB PRC data shows that all types of ships have been targeted.
Reports of incidents of tugs, fishing vessels and various offshore support vessels, and even a drilling vessel, are also part of recent statistics.
Additionally, new evidence suggests the coronavirus pandemic has impacted security threats at sea, with analysts saying the pandemic – at least over time – may indirectly affect overall piracy risk and armed robberies.
Ti’s Cullen concludes: âWith Asia-Pacific shippers already facing sharp increases in sea and air freight prices, the situation ahead of the Christmas peak season can become very serious. “
About the Author
Patrick Burnson, Editor-in-Chief Mr. Burnson is a widely published writer and editor specializing in international trade, global logistics and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He can be contacted at his office in the city center: [emailÂ protected]