Patricio Quintanilla Paulet
Rector of La Salle University
Sometimes I ask my university students, What did you have for breakfast today? The frequent answer it’s bread, milk, cheese… The next question is what is the raw material of bread? The answer is flour and we begin to analyze its origin; The flour is made from wheat, most of this cereal is imported, it arrives in ships from its country of origin, it is unloaded at a port, it is transported in trucks and so we can continue. That is the supply chain.
The world economy was in the process of recoveryAfter relatively alleviating the global problem of the pandemic, which caused a drop in production in almost all the countries of the world and the near economic future was viewed with optimism, with expectations of economic growth, but the supply chain was affected.
A worldwide commercial phenomenon, it has affected the global supply chain, which is negatively impacting the recovery. The main causes are the congestion of the world’s ports, which is delaying the shipment of goods; container shortage; increased demand, which was suppressed by the pandemic; lack of a sufficient number of truck drivers. These phenomena and others that derive from them, generate a vicious circle.
The shortage of containers has caused a large increase in freight, especially from Asian countries to North America, in particular to the port of Los Angeles, which concentrates almost 40% of trade to the United States.
There has been a reduction in world production, because it not only impacts consumers but mainly in production processes, due to the lack of inputs and spare parts in industrial facilities.
The International Monetary Fund, as a consequence of this problem, has reduced the estimate of world growth for this year and in particular in the case of China and the United States, the main affected.
Other impact is the increase in the central bank benchmark interest rate; Peru already did it for the third time this month; it is to be expected that the same will happen in Mexico and Colombia; In the case of the United States, the FED, which is its central bank, has announced that it would reduce the monetary stimulus (tapering) that has been taking place for several months.
The problem that has arisen in the global supply chain is impacting the global supply, generating inflationary pressures and, consequently, reducing the monetary stimulus of the central banks, increasing the interest rate, among other measures.
Kingston is an accomplished author and journalist, known for his in-depth and engaging writing on sports. He currently works as a writer at 247 News Agency, where he has established himself as a respected voice in the sports industry.