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HomeSourcingSupply Chain Weekly Wrap-Up 07/29/2022-08/04/2022

Supply Chain Weekly Wrap-Up 07/29/2022-08/04/2022


U.S congress passes bill boosting the semiconductor industry

The U.S. House of Representatives has passed legislation which has been called the “Chips and Science” act after over a year of efforts. The bill is hoped to boost supply chains in the country, as it will provide over $52 billion in government subsidies for the domestic production of chips. The package also includes an investment tax credit for chip plants, with an estimated value of $24 billion overall.

One key motivation for this development is to increase the United States’ ability to compete against manufacturers in other nations, including China. The legislation also offers $200 billion over the next decade to boost domestic scientific research to be able to compete more effectively with Chinese manufacturers. Some aspects of investment are still awaiting finalization from the Congress, with Biden expected to sign the bill into law this week.

Since most of the world has been reliant on China for the production of chips, it is no surprise that the Chinese Embassy have said that the country “firmly oppose” the legislation revealed by the White House. Aides have said that the leaders of both the United States and China, the world’s two largest economies, will discuss supply chain and other economic issues in the near future.

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Hope for food supply chain as first grain ship leaves Ukraine

Since the war in Ukraine broke out in February, the blockade of Ukraine’s grain has contributed to a global food supply chain crisis, which has led to food shortages and price increases.  However, there has been a glimmer of hope for supply chains this week, as the first ship carrying grain has left the Ukrainian port of Odesa, with multiple shipments planned in the coming weeks.

Under a new landmark deal, the two sides have reached an agreement which is hoped to help the recovery of food supply chains. The ship called the Razoni, which is carrying 26,000 tonnes of corn, will be inspected in Turkish waters before docking at the port of Tripoli in Lebanon. Restarting shipments is vital, as Ukraine is responsible for 81% of Lebanon’s what imports alone.

The deal, made by the UN and Turkey, took two months to reach and is in place for 120 days, with the opportunity to extend the expiry date. Under the terms of the agreement, Russia cannot target ports while shipments are in progress. This development has been welcomed by officials around the world, but this is of course met with a high level of concern. EU spokesperson Peter Stano said Russia must ensure the “whole deal” is met to resume Ukrainian exports around the world.

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Parts shortages are causing turbulence for airlines

According to a recent report conducted by The Wall Street Journal, some international airlines are being forced ground flights because of ongoing aircraft parts shortages. Airlines are yet to reach pre-pandemic capacity, and the ongoing supply chain bottlenecks, labor issues and problems with manufacturers are all proving to cause further problems for the industry.

Germany’s largest airline, Lufthansa, is one big name that is struggling with shortages, as it has been forced to search for cabin panels from various parts of the world. Qatar Airways has also had to make some changes. The state-owned flag carrier has been flying planes for fewer hours to reduce the potential of engine maintenance delays and has kept aircraft on standby in event of more aircraft being grounded.

These disruptions have come at a time where the industry is already under strain, as flight cancellations, delays and a lack of pilots and baggage handlers are causing travel chaos. To navigate the tricky situation, aircraft manufacturers are stepping up production to avoid delivery delays this summer. Rolls-Royce have reported having supply chain issues, and CFM International is currently two months behind its schedule for the delivery of engines.

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Etiknews Staff
Etiknews Staff
Etiknews is dedicated to Ethical and sustainable business news.


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