Global supply chain pressures worsen in April
The New York Branch of the U.S. Federal Reserve (Fed) reported that pressures on the global supply chain worsened in April due to quarantine measures in China, the war in Ukraine and rising air freight costs between the U.S. and Asia.
While the world economy is recovering from the COVID-19 outbreak, supply chain disruptions continue to pose a major challenge, the statement said, pointing out that geopolitical and pandemic-related recent developments may put more pressure on global supply chains.
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Although the index has historically remained at very high levels, it points to an easing in global supply chain pressures in the period from December 2021 to March. The April reading showed that conditions are deteriorating as new stresses emerge in the global supply chain.
The statement said the worsening of global supply chain pressures in April was mainly due to delivery times in China and the Eurozone and an increase in air freight costs from the US to Asia.
“These developments can be attributed to the strict COVID-19-related quarantine measures imposed in China, as well as the consequences of the Ukraine-Russia conflict on supply chains in Europe,” the New York Fed said in a statement.
Pointing out that the moderation observed in recent months has partially reversed, the statement noted that quarantine measures and geopolitical developments in China and the Eurozone have put more pressure on delivery times and transportation costs in China and the Eurozone.
