Topic: Surging shipping rates pose new headwind for the global economy
Shocks to supply chains are engulfing a wider swath of the global economy as the pandemic rages on, threatening to stifle Asia’s trade-led recovery just as soaring freight rates make it harder for businesses to weather another year like 2020.
Shortages of consumer goods like paper towels and work-from-home gear early in the COVID-19 crisis have given way to parts shortfalls in one of the most globally integrated of industries: auto manufacturing.
Compounding the industrial imbalances are transport woes plaguing consumer and healthcare sectors still dealing with a dearth of available shipping containers to move components and finished products out of China, Taiwan, South Korea and Asia’s other export powers.
Nerijus Poskus, vice president for global ocean at San Francisco-based freight forwarder Flexport Inc, reckons the world needs the equivalent of 500,000 more 20-foot containers — roughly enough to fill 25 of the largest ships in operation — to satisfy the current demand. In the meantime, standard container rates on transpacific routes are quadruple what they were a year ago. And that is before equipment surcharges and premiums for guaranteed loading are added.
“Anyone paying the freight bills in 2020 though knows the true cost of shipping is much higher than even the recently increased rates,” Poskus said. “We expect that to only increase in 2021.”
The unstoppable rise in container shipping costs is borne out by December figures recently announced by Taiwan’s three major shipping companies — Evergreen Marine Corp, Yang Ming Marine Transport Corp and Wan Hai Lines Ltd — which saw a record-breaking year-on-year surge of revenue at 58.8 percent, 35.19 percent and 75.71 percent respectively.
Source article: https://www.taipeitimes.com/News/lang/archives/2021/01/18/2003750759
Topic: The world is dependent on Taiwan for semiconductors
As China pushes the world to avoid official dealings with Taiwan, leaders across the globe are realizing just how dependent they have become on the island democracy.
Taiwan is being courted for its capacity to make leading-edge computer chips. That is mostly down to Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest foundry and go-to producer of chips for Apple Inc smartphones, artificial intelligence and high-performance computing.
Taiwan’s role in the world economy largely existed below the radar until it came to recent prominence as the auto industry suffered shortfalls in chips used for everything from parking sensors to reducing emissions. With carmakers including Germany’s Volkswagen AG, Ford Motor Co of the US and Japan’s Toyota Motor Corp forced to halt production and idle plants, Taiwan’s importance has suddenly become too big to ignore.
That is not to say Taiwan is the only player in the semiconductor supply chain. The US still holds dominant positions, notably in chip design and electronic software tools; ASML Holding NV of the Netherlands has a monopoly on the machines needed to fabricate the best chips; Japan is a key supplier of equipment, chemicals and wafers.
However, as the emphasis shifts to ever smaller, more powerful chips that require less energy, TSMC is increasingly in a field of its own. It has also helped Taiwan form a comprehensive ecosystem around it: ASE Technology Holding is the world’s top chip assembler, while MediaTek has become the largest smartphone chipset vendor.
A big worry is that TSMC’s chip factories could become collateral damage if China were to make good on threats to invade Taiwan if it moves toward independence.
“Taiwan is the center of gravity of Chinese security policy,” said Mathieu Duchatel, director of the Asia program at the Institut Montaigne in Paris. Preserving the world’s most advanced fabs “is in the interests of everyone.”
Source article: https://www.taipeitimes.com/News/lang/archives/2021/02/01/2003751534
Topic: Reinventing Workers for the Post-COVID Economy
The nation’s economic recovery from the COVID-19 pandemic will hinge to some extent on how quickly show managers can become electricians, whether taxi drivers can become plumbers, and how many cooks can manage software for a bank.
This is likely to prove especially problematic for millions of low-paid workers in service industries like retailing, hospitality, building maintenance and transportation, which may be permanently impaired or fundamentally transformed. What will janitors do if fewer people work in offices? What will waiters do if the urban restaurant ecosystem never recovers its density?
Their prognosis is bleak. Marcela Escobari, an economist at the Brookings Institution, warns that even if the economy adds jobs as the coronavirus risk fades, “the rebound won’t help the people that have been hurt the most.”
Looking back over 16 years of data, Escobari finds that workers in the occupations most heavily hit since the spring will have a difficult time reinventing themselves. Taxi drivers, dancers and front-desk clerks have poor track records moving to jobs as, say, registered nurses, pipe layers or instrumentation technicians.
COVID is abruptly taking out a swath of jobs that were thought to be comparatively resilient, in services that require personal contact with customers. And the jolt has landed squarely on workers with little or no education beyond high school, toiling in the low-wage service economy.
“The damage to the economy and particularly to workers will probably be longer lasting than we think it is going to be,” said Peter Beard, senior vice president at the Greater Houston Partnership, an economic development group.
What’s more, he said, COVID will intensify underlying dynamics that were already transforming the workplace. Automation, for one, will most likely accelerate as employers seek to protect their businesses from future pandemics.
The challenge is not insurmountable. Yet despite scattered success stories, moving millions of workers into new occupations remains an enormous challenge.
“We need a New Deal for skills,” said Amit Sevak, president of Revature, a company that hires workers, trains them to use digital tools and helps place them in jobs. “President Roosevelt deployed the massive number of workers unemployed in the Great Depression on projects that created many of the dams and roads and bridges we have. We need something like that.”