Food supply chains ‘falling apart’ in Ukraine
Officials from the World Food Programme (WFP), the food-assistance branch of the United Nations are warning that food supply chains in Ukraine are collapsing. The transport of food is impossible in some areas due to key infrastructure such as trains and bridges being destroyed, as well as grocery stores and warehouses being empty.
The agency has positioned bulk food, wheat flour and food rations outside major cities which are under fire in an attempt to assist over 3 million people. So far, 12,000 tons of food have been delivered within the country and 8,000 tons of food is being prepared to be sent from neighboring countries. Food security is also a risk to other countries such as Lebanon which rely on Ukrainian imports, with officials saying “collateral hunger” is likely.
Jakob Kern, WFP Emergency Coordinator for the Ukraine crisis, expressed his concern about the situation, saying that “the country’s food supply chain is falling apart. Movements of goods have slowed down due to insecurity and the reluctance of drivers.” He also mentioned that repairing broken supply chains in the country is a “mammoth task” for the WFP.
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Companies suspend operations in Japan due to an earthquake
A major earthquake which happened in Japan is causing additional problems for already constrained global automotive supply chains. The earthquake, with a reported 7.4 magnitude, has so far impacted many companies in the country, including Toyota Motor and Renesas Electronics, which is a key supplier of semiconductor chips used in the production of vehicles.
Toyota announced that it would suspend operations at over half of its plants across Japan, amounting to 18 production lines at 11 plants being down due to supply problems caused by the earthquake. The shutdowns were announced just a day after the company cut production output by 150,000 units from April to June because of ongoing supply chain uncertainty.
Renesas, which reportedly makes nearly a third of the microcontroller chips used in cars globally, operates three plants close to the earthquake’s epicenter in northeast Japan which had to be shut, according to the company. It is attempting to get its plants up and running as soon as possible. As well as this, Subaru, another Japanese automaker, shut two auto assembly plants and an engine and transmission plant due to the earthquake.
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Canada Pacific Railway shutdown causes further supply chain strains
Due to a labor dispute with over 3,000 employees, Canadian Pacific Railway (CP) has shut down its railway network. The loss of the country’s second-largest freight rail operator has already caused vast disruptions, including stalling shipments of goods which will eventually bring backlogs to ports. As shown in December due to the landslides in Canada, the stoppage of such a vast transport network can have serious impacts on supply chains.
In Canada, CP’s rail network stretches from Vancouver to Montreal, and in the U.S., it reaches key locations including Chicago, New York and Minneapolis. The railway also provides an essential link to the ports of Vancouver and Montreal. Julia Kuzeljevich, a spokesperson for the Canadian International Freight Forwarders Association has warned that “you only have a matter of days, if not hours, before you have a landlocked and bottlenecked supply chain on top of everything else.”
The solution is unclear, but there have already been calls from multiple industry groups to legislate the railway workers back to work. Companies are worried about the impact that the events will have on supply chains. Manny Calandrino, President and CEO of Consolidated Fastfrate, which has long-standing partnership with CP said that “we really didn’t need this one,” meaning another supply chain disruption, after facing many challenges in a short amount of time.
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