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BEARING INDUSTRY POST PANDEMIC PROBLEMS

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The bearing industry heavily depends on the Chinese production units to fulfill its global needs as major brands have outsourced their production. The supply chain also plays a very important part in the delivery and availability of the product.

The lead time is crucial in the bearing industry as timely delivery of final products is totally dependent on the logistics of bearings for machinery.

The global bearing solution is heavily dependent on

  1. Exchange rate stability

The Yuan is getting stronger against the dollar which is reducing its cost effective capability in the global scenario. As the Yuan gets stronger the balance of payments of the rest of the world goes into the negative zone and trade decreases. The cost of goods becomes high resulting in inflation and the end user bears most of the brunt as the competitiveness of their goods becomes questionable.

  1.   Shipping

disruption in supply chain due to covid-19 restrictions and SOP requirements, closing and restriction on ports, non availability of containers, 300 % increase in freights from 40 usd per cbm to 180 usd per cbm on LCL port of loading QINDAO, restriction of weight on LCL cargo (maximum 10 tons) as Per shipping companies.  Fumigation of containers causes lead times to increase causing delay.

  1.  Energy policy

Due to energy shortage the government of china has imposed restrictions on industrial activity and have reduced it to 50% of the total production time and on selected days in a week causing huge backlog of orders

 Pending production.   

  1.  Supply chain disruptions

Container shortages as china demand more containers for their overall export, which also includes covid-19 vaccines. Closing of factories due to non compliance of SOPS. Increase in freight of shipping containers has been a major hurdle as most business expect the price to stabilize in the future 

  1.  Raw material price and availability

The world is facing shortages of IC chips for computers, food products, similarly iron ore is in short supply and its price has been increasing at a steady rate. Global politics is also major player “China and Australia” as an example. The iron ore prices have doubled from last year.

  1. Global inflation

As governments struggle to vaccinate people, and the economy and the businesses struggle to keep afloat, supply chain problems due to the fact that last year demand was low due to covid-19, as life tries to get normal demand for products increase but supply is limited or hindered resulting in rise in the prices of commodities. The Government borrowing on interest and inability to pay their debt puts pressure on local currencies.

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