Global supply chains at risk of collapse, warn business leaders

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Global supply chains are at risk of collapse unless governments worldwide restore freedom of movement to transport workers and give them priority over vaccines, a coalition of international business leaders has warned

In an open letter to heads of state and government attending the United Nations General Assembly, the International Chamber of Shipping and other transport groups warned that nearly two years of travel bans and other restrictions had had an “enormously detrimental impact on [transport workers’] wellbeing and safety”.

The “mistreatment” of workers was piling pressure on the already “crumbling” global supply chain, they said, adding that any failure to act was likely to exacerbate existing shortages of essential goods including electronics, food, fuel and medical supplies ahead of Christmas.

Pandemic border restrictions, distancing requirements and factory closures have all wreaked havoc on traditional supply chains, leading to congestion at ports, delivery delays and soaring freight rates on the main shipping routes between China, the US and Europe. A shortage of transport workers has piled on the pressure, the organisations warned, and was only expected to get worse.

The plea came as the UK government moved to deploy soldiers to deliver petrol after Britain’s decision to leave the EU and while the pandemic had led to a shortage of truck drivers. There is a shortage of truck drivers globally, with the American Trucking Association reporting a shortfall of nearly 61,000 drivers in the US.

The transport organisations, which represent 65m workers, accused governments of failing to listen, and called for “decisive and co-ordinated action” to resolve this crisis.

At the peak of the crisis 400,000 seafarers were unable to leave their ships, with some working for as long as 18 months over their initial contracts, the letter said. Flights have been restricted and aviation workers have faced the inconsistency of border, travel and vaccine restrictions/requirements, it added.

Additional and systemic stopping at road borders has also meant truck drivers have been forced to wait, sometimes weeks, before being able to complete their journeys and return home.

“Global supply chains are beginning to buckle as two years’ worth of strain on transport workers take their toll,” the groups wrote.

“All transport sectors are also seeing a shortage of workers, and expect more to leave as a result of the poor treatment millions have faced during the pandemic, putting the supply chain under greater threat,” the letter said.

The World Health Organization and International Labour Organization need to act quickly if they want to address these concerns, the letter added.

Willie Walsh, director-general of the International Air Transport Association, a signatory, said the group hoped common sense would prevail. “But despite all the good work going on behind the scenes, the data available and expertise, we have political science influencing decisions, not the real science,” he said.

Umberto de Pretto, secretary-general of the International Road Transport Union, said: “What is required is a political decision. Do you want an economic recovery or not? If you do, you want political leadership to address this crisis.”

Last week shipping group Maersk, which carries about one-fifth of all seaborne freight and is seen as a bellwether for global trade, told the Financial Times it was on track to deliver record profits this year because of disruption to global supply chains as a resurgence in consumer demand sent freight rates soaring. However, it also said that it was likely to be 2022 before the supply chain began to return to normal.

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