Supply chain issues have been a huge issue this year for many economies as we emerge from lockdown and seek to heal the scars of COVID-19 by resuming a more normal economic life.
And, as we report this week, with supply chain congestion and widespread delays in the international container trades set to continue, marine insurers have warned that the growing challenges of abandoned cargo will remain and are highly likely to increase.
Indeed, as we also report, speaking during the AGCS Marine Trends to Watch in 2022 webinar, Rahul Khanna, global head of Marine Risk Consulting at Allianz Global Corporate & Specialty (AGCS), said the world’s supply chain issues were centred on the lack of available containers.
He said there has been a huge increase in the cost of shipping a container, with the charges for one to be shipped from China to the west coast of the United States having increased fourfold.
Meanwhile in Europe, surging gas costs are forcing European governments to discuss billions in aid for households and troubled suppliers, as concern mounts over a deepening winter energy crisis.
In the UK, the price of wholesale gas has surged by 250% since the beginning of the year and has risen by 70% since August, according to figures from Oil & Gas UK, putting pressure on UK suppliers.
The rise in gas prices has been blamed on a number of factors, including a cold winter which left stocks depleted, high demand for liquefied natural gas from Asia and a reduction in supplies from Russia.
What concerns me here is the last factor: reduced supply from Russia.
Why? Because Russia’s President, Vladimir Putin, appears to be playing a nasty game once again. Putin is attempting to pressure Europe into rubber-stamping his Nord Stream 2 pipeline by effectively weaponizing Russian gas supplies.
With construction work on Russia’s controversial energy pipeline now finally complete, critics say the Kremlin is artificially pushing up gas prices in a bid to speed up the lengthy certification process and make the pipeline operational.
Many analysts believe Moscow’s goal is to highlight the need for Nord Stream 2 in order to bypass the many legal and bureaucratic delays that still prevent the pipeline from delivering gas from Russia to Germany across the Baltic Sea.
At present, it is estimated that administrative hurdles could delay the pipeline by months or possibly even more than a year – though I strongly suspect this timeframe will reduce dramatically as the current gas supply crisis continues.
Enjoy the read,
Editor, Emerging Risks