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  • Writer's pictureDean Dwyer

The global supply chain crisis

Last year the world suffered a huge supply chain meltdown over the Covid-19 virus. Events have now conspired to create a supply chain snag for the latter part of 2022 that will easily surpass the mess that occurred back then.

China is in lockdown over fresh Covid-19 outbreaks, and we have the supply breakdowns from Russia’s invasion of Ukraine. It’s still not clear what the impact of the war in this troubled region will be. Russia and Ukraine have been major exporters of several key commodities for decades. It's been suggested that Vladimir Putin's ultimate goal is the acquisition of the land rather than the country. This makes sense when one realises how important this land is: a favourable climate and the rich, fertile black soil of the steppe made the Ukraine the breadbasket of Russia until the collapse of the USSR in 1991. At the height of production Ukraine was responsible for almost half of the former Soviet Union's total agricultural output, and the country is a major producer of grain, sugar beet, cotton, meat and dairy products. Mineral resources include vast iron ore and coal reserves, while oil is extracted near the Carpathian mountains, in Crimea and in the Donetsk region.

There is no way Ukraine is going to produce various crops while fighting a war. With its southern ports locked, the country can’t even export grain from previous years. The price of wheat rose to $13 per bushel immediately after the invasion, and while it has levelled off at around $11 per bushel this still leaves the price nearly double what it was at the beginning of the year. The war has also resulted in the loss of many other key commodities. Russia and Ukraine account for around 80% of the global sunflower oil market, 25% of its coal, 30% of its refined petroleum and 20% of its iron ore.

Because food is vital to a nation’s economy and stability, many countries have banned the export of several of its products. Indonesia has banned the export of palm oil, which amounts to 30% of global cooking oil demand. The Indonesian government made this move in order to lower the cost of palm oil for the domestic market, but with local farmers unable to export their palm oil to a global market they have no incentive to increase production. By far the biggest supply problem in the industrial field is Europe’s dependency on Russian natural gas: Germany buys 40% of its gas from this source. Had the war taken place 20 years ago Germany would be in a far better situation in this regard, because after the Fukushima nuclear disaster in Japan it became obsessed with closing all its nuclear power stations. At its peak in the early 2000s nuclear power generated 40% of German electricity. Today only 20% is generated in this manner, and the current plan is to close all nuclear plants by 2025.

Russia’s invasion of Ukraine seemed initially to prompt a rethink of Berlin’s nuclear policy, with Green economics minister Robert Habeck saying he wouldn't stand in the way of any decision to keep nuclear power plants running for longer on ideological grounds. It's a contentious issue because the CEO of Eon – Germany’s largest generator of electricity, with three remaining nuclear plants in the country – has ruled out extending the life of its nuclear power stations even as Europe’s largest economy prepares for the rationing of energy supplies and to wean itself off Russian hydrocarbons. “There is no future for nuclear in Germany” said chief executive Leo Birnbaum. “It is too emotional. There will be no change in either our opinion or legislation.”

Meanwhile, it must be said that China’s latest COVID-related lockdown antics amount to nothing short of insanity. Media outlets around the world – from the Chinese Ministry of Propaganda to the New York Times – were quick to declare that China had 'overcome' the pandemic, having decisively defeated the virus while demonstrating the virtues of unbridled autocracy in the process. Xi Jinping was set to use China’s apparent Covid success as a central argument for enshrining himself as Emperor for Life at the upcoming Communist Party Congress in October. Instead, Beijing’s zero-Covid policy has resulted in the shutdown of huge portions of the Chinese economy. In Shanghai – a city of 26.3 million inhabitants in 2019 – hundreds of factories have been closed, and airfreight warehouses at Shanghai's airport are log-jammed as a result of strict Covid testing protocols. At the city’s port more than 120 container vessels are on hold. Ports throughout the world which used to run like clockwork are now beset by delays, with container ships queuing for days in some of the worst congestion ever recorded. In Shenzhen – a major manufacturing hub in China’s south with a population of 12.6 million in 2021 – trucking costs have increased by up to 300% due to a vast backlog of orders and a shortage of drivers following the introduction of similar Covid restrictions.

Although the current situation is challenging, let’s remember that during the Tribulation Period, the situation will be dire. Firstly, we have the third seal judgement in Revelation 6:5-6: When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand. And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine. A quart of wheat or barley was enough food for a person for one day, while a denarius was a day’s wage for the average worker (Matthew 20:2). Therefore, this verse speaks of severe food shortages which pushes up the price of basic food items to an amount which will swallow up every bit of the wage of the average worker.

There is also the second trumpet judgement where the seas a struck by “a great mountain”. Revelation 8:8 says: Then the second angel sounded: And something like a great mountain burning with fire was thrown into the sea, and a third of the sea became blood. And a third of the living creatures in the sea died, and a third of the ships were destroyed. Because many nations (like ours) have sent manufacturing offshore, we have outsourced our ability to provide our population with many of the items we now take for granted. COVID lockdowns have demonstrated just how volatile the overseas supply chain is and when a third of the ships are destroyed, many nations will not be able to provide food and medication for their people.

But here is the good news: for those who have a saving knowledge of Jesus, although times may become difficult, He will never leave us, nor forsake us. Additionally, as He is our blessed hope, we are not appointed to God’s wrath during the Tribulation Period, but will be safe in the heavenly realm while the Earth experiences the full and undiluted wrath of God. Throw out the lifeline – many people don’t realise just how much danger they are about to face.

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