How Omicron could affect your global supply chain

How Omicron could affect your global supply chain

January 2022  – Managing the plethora of tests, paperwork and legislation required for the movement of goods and people since the start of Covid19 has proved to be no easy task.  Now with the emergence of the new Omicron variant, transportation of goods across borders may prove to be even more challenging. 

Especially with countries like China enforcing a ‘zero-Covid’ policy to prevent cases entering the country.  With stricter rules meaning stricter checks and enforced lockdown’s the ripples are bound to be felt up and down the supply chain. 

With a huge increase in spending during the pandemic and a shift from buying services to purchasing products, there has already been huge pressure on the global supply chain to keep up with and manage increase demand

Omicron impacts on global supply

Delays and bottlenecks have been evident and further restrictions could mean growing shortages and extended order backlogs may be inevitable as a consequence of a renewed pandemic. Subsequent decreases in air travel in an effort to contain the Omicron variant may potentially reduce air cargo capacity especially on key trading lanes like those between Europe and Asia or South Africa and North America.


Recent announcements from the UK government have indicated that a full lockdown is less likely as the country moves towards living along with Covid rather than avoiding it. However, this will do little to reduce pressure on global supply as other countries make their own efforts to contain the Omicron variant. 


Additional factors

To add to the already strained supply chain industry, the situation is compounded by the well-reported driver shortage and reducing workforce. The last couple of years has been dubbed as ‘The Great Resignation’ as Covid forced many to work from home.


This created an opportunity for many workers to assess their situation and change their approach to making an income. Freelance opportunities, self-employment, and hobbies converted into businesses have been rife during this time. 


None of this bodes well for global supply chain operators who are already reeling from the shock of lockdowns and more recently, the Covid Delta variant. During the past year companies large and small have been battling against all odds to maintain shipping times and deliver goods.


Global outlook


As the Covid crisis abated and things began to stabilize the industry was hit with another large blow from the Omicron variant, leaving the global business community in no doubt that the disruption is far from over. 


The World Health Organisation (WHO), labelled Omicron as a ‘variant of concern’, and evidence of the strain has been discovered in many countries including UK, France, Germany, Belgium, the Netherlands, Hong Kong, Italy Israel, Canada, and Australia.


All of this indicated further problems on a worldwide scale and with China being the home of some of the busiest ports in the world, it is likely that global shipping will experience more difficulties especially for things such as manufacturing components and consumer goods.


Even with countries like Asia easing restrictions and seeing their workforce return to factories and offices, logistical challenges still remain. Production may be coming back online but shipping constraints risk creating a substantial lag between order and delivery. 


Final Words


Currently, the effects of the Omicron variant are still being monitored by world health organisations and the impact and level of severity caused by the strain are still unclear. What is clear is that global supply chains will be faced with another test of resilience, and achieving full recovery will be a long and arduous process. Restrictions and stricter checks look likely to continue as countries struggle to manage and lessen the effects of Omicron while and maintaining their local and global economies.

Get in touch to see how i2B can help with your global supply chain in these challenging times

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