html On June 23, Lufthansa, Europe’s largest airline, announced that it would cancel more than 3,000 flights this summer due to staff shortages, strikes and the new crown epidemic.
Lufthansa explained: "The impact of the air traffic controllers' strike, the weather and especially the increase in the number of new coronavirus infections has become greater." The company noted that in the past few days, more and more employees have called in sick. many. Of the 80,000 flights departing and landing in Frankfurt and Munich, the group canceled 2,200 flights, mainly domestic and intra-European routes.
In May previously, Lufthansa Cargo , the world's largest air cargo company, also ordered ten Boeing cargo planes, but now it is facing a staff shortage.
The epidemic has rebounded again, causing a large number of flight cancellations and a significant reduction in air cargo volume, exacerbating the original inflation. The German people who love beer are no longer able to drink beer at the same price as before due to the disruption of the supply chain.
At the same time, geopolitical conflicts continue to affect Germany's energy issues. Coupled with the first large-scale port worker strike in more than ten years, the German industrial supply chain faces an important challenge.
Zhanglian·First Logistics Network This issue of "Pandemic and Supply Chain" analyzes the changes in the German supply chain under the new coronavirus epidemic.
1. EU Locomotive becomes the "Sick Man of Germany"
With the resurgence of the new coronavirus in Germany and the continuation of the geopolitical conflict between Russia and Ukraine, Germany is facing severe inflation. The United Kingdom, which has been dubbed the "European Economic Sick Man" before, has passed this label on to Germany.
Oliver Lakau, chief German economist at Oxford Economics, said the price shock for oil and natural gas was spreading to drive inflation for many other products and services. "It is undeniable that higher energy and commodity prices will affect other products such as food and beverage prices, which may lead to higher restaurant prices and thereby push up services sector inflation," he said.
Beer, the most indispensable consumer product in German life, is now stretched due to supply chain problems. Today, the average German consumes 83.8 liters of beer per year. In 1970, this number was 150 liters. The price of raw materials for beer production has risen rapidly.
In June, Germany's Faust beer increased the price of its beer by 10 cents per liter, equivalent to a 6.5% increase from usual, bringing the price of a 20-pack of its best-selling Pils to 16.49 euros. "I have never seen inflation like this," said Johannes Faust, CEO of the Faust brewery.
The German government has always been very cautious about the price of beer. In 1844, King Ludwig I of Germany increased the price of beer by 8%, and labor and military riots broke out in Munich that lasted for three days.
Johannes Faust, CEO of Faust Brewery: "I have never seen inflation like this" (Source: FINANCIAL TIMES)
The German Statistics Office reported in June that German producer prices hit a record high in May Rising at a record pace, inflation jumped to 7.9%, the highest figure since German reunification. Compared with data in May 2021, the production price of industrial products increased by 33.6%. German producer prices have climbed to new records every month since December 2021.
Aurelien Duthoit, an industry expert at Allianz Trade, the world's leading trade credit insurance company, said the cost of basic goods in Germany is likely to continue to rise. Duthoit forecasts growth of 10.7% this year, which means household spending could increase by around 250 euros per person.
2. The latest issue of Germany’s supply chain crisis: labor conflicts
The new coronavirus pandemic and the Russia-Ukraine conflict have caused strong growth in domestic demand in Germany, but they have also exposed acute labor problems within Germany.
html On June 10, dock workers in Hamburg, Germany went on strike. This was the first strike at Germany’s largest port in more than 30 years. Other northern German port cities are also involved in salary negotiations.
html On June 9, the German Federation of Service Industry Unions announced that several hours of strikes would be held at multiple seaports in Germany. As many as 150,000 containers are stranded in German ports without being dismantled. Foreign media predict that this strike action will intensify congestion in European ports to a certain extent.
The main purpose of the strike is to increase workers' hourly wages and inflation compensation, so as to ensure that workers have the appropriate conditions to cope with the pressure of life caused by inflation, product shortages and soaring prices in Europe.
In fact, since the congestion problem at US ports last year, global supply chain problems have become increasingly tense, and freight prices have soared during that period. However, the recent strikes at European ports have undoubtedly dealt a severe blow to global logistics.
In this regard, a logistics provider in Europe said: The current seller's goods that have arrived at the port will definitely be affected. As for the batch that is still floating at sea, the goods are also very likely to face delays.
Leonard Kuntscher, spokesman for the Central Association of German Seaport Companies (ZDS), said: "This is the first strike in decades. In the final negotiations, the unions got our demands. Tomorrow, negotiations will continue. The unions demand compensation for currency. Expansion and additional growth. Overall, demand increased by 14% in one year. ”
3. Falling into the American manufacturing crisis still helps the United States fight against China
(1) Germany cannot do without trade with China. Several strict coronavirus-related lockdowns across China in 2022 have not had much of an impact on trade with Germany. In April 2022, Germany's imports from China increased by 52.8% year-on-year to 16.7 billion euros.
Regarding the significant increase in China's imports from Germany, this was mainly due to the import of chemical products worth 4.4 billion euros, a six-fold increase over the previous year. The rise in imports has also been fueled by surging demand for raw materials used in pharmaceutical production, data processing equipment and other electrical equipment.
html On June 13, the Energy and Clean Air Research Center, a think tank headquartered in , said that in the past two months, China has surpassed Germany to become the main customer of Russian energy exports. China paid 12.6 billion euros to Germany's 12.1 billion euros, although the EU as a whole still accounts for about 61% of Russia's energy sales.
In 2021, China became Germany’s largest trading partner for the sixth consecutive year. Booming business is accompanied politically by intensive bilateral dialogue.
(2) followed suit to contain China’s pawns. html At the end of May, the German Ministry of Economic Affairs rejected Volkswagen's application for guarantee for investing in China. Therefore, Volkswagen must bear the investment risk of 3 billion euros alone. The reason given by the German Ministry of Economic Affairs was the so-called human rights situation in Xinjiang.
Germany said that human rights should be given priority in future cooperation with foreign countries, but it is not known whether the final result will be "human rights" or "the United States". On July 13, 2021, six departments of the U.S. Department of State, Treasury, Commerce, Homeland Security, Office of the Trade Representative, and Labor jointly issued a so-called updated version of the "Xinjiang Supply Chain Business Advisory Announcement" .
In this lie of the century compiled by the US government, it is claimed that the Chinese government is carrying out "genocide, crimes against humanity, and forced labor" in Xinjiang. On December 14, 2021, based on earlier lies, the U.S. House of Representatives passed the "Uyghur Forced Labor Prevention Act" agreed upon by the House and Senate in August, fabricating the so-called lies about slavery in China's Xinjiang supply chain.
On June 21, 2022, the so-called "Uyghur Forced Labor Prevention Act" in the United States officially came into effect and entered the full implementation stage. All products produced in China's Xinjiang region are presumed to be so-called "forced labor" products, and the import of any products related to Xinjiang is prohibited.
When people see more than 80% of modern machinery operating in China's Xinjiang cotton fields, they can't help but wonder, is the United States' lie of the century saying that China has enslaved machinery and drones? However, the German government has followed suit step by step in response to such lies.
In addition, German electronics and home appliances giant MediaMarkt cited the Russian military's use of products of Chinese drone manufacturer DJI (DJI) as an excuse. Xinjiang products were removed from retail stores.
By 2021, China will become Germany’s largest trading partner for six consecutive years. Former German Chancellor Merkel warned in November last year that complete decoupling from China was a mistake and would cause harm to Germany and Europe. However, amid the lies about Xinjiang created by the United States and other Western countries, the German political arena followed the United States' containment strategy against China and sought decoupling in the supply chain.
German Deputy Chancellor and Economics Minister Robert Harbeck advocates that Germany keep its distance from China. "We are diversifying more actively and reducing our dependence on China. The weight of safeguarding human rights is heavier."
He added that Germany is diversifying and reducing its dependence on China, and will closely examine those interested in investing in China. Application by German companies to exclude human rights abuses and forced labor in supply chains. "This is also true at the EU level. Government subsidies to Chinese competitors who want to enter the internal market should also be paid closer attention to."
The German Economy Minister also said that Germany will change the model of dealing with China and strive to reduce its China's dependence. Previously, the German Foreign Minister also called for an investigation into the human rights situation in Xinjiang.
