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TyTek urge customers to check and replenish inventory as Chinese supply chain ‘perfect storm’ could last six months

Power blackouts in more than 10 provinces across the mainland of China have forced global suppliers to suspend operations at some of their factories.

A reliable source explained to us that this has the potential to extend into next March and serves to exacerbate the ongoing situation already caused by the shipping crisis, creating a perfect storm in the already under pressure supply chain.

As a result, TyTek urge customers whose product is manufactured in China to place orders with a view to ensuring inventory for the next six months, as we look into the cause of these suspensions.

Our source in China explains: “The recent dual control of energy consumption policy brought in Chinese government has had an impact on the production capacity of manufacturing companies. Deliveries in some industries have had to be delayed to save electric power, and increasingly factory shut downs are being enforced, whereby they can open for half the week or so.

In addition, the China Ministry of Ecology and Environment issued a draft of an ‘2021-2022 Autumn and Winter Action Plan for Air Pollution Management’. This autumn and winter (from October 1 2021 to March 31 2022), the production capacity in some industries could be further restricted. 

Our source concluded: “So far we have not met any problems in our regular production but we strongly advise you to be prepared for unexpected situations during this time. We recommend that you look at your forecasting and move up your order plan and place your orders earlier than usual.

Please be aware: The Chinese New Year Holiday will be from Jan 31 to Feb 6 2022. Due to tougher conditions in both ocean and air shipping, it will be more difficult to secure bookings. 

Besides the scarcity of containers and the rising shipping cost, we would strongly encourage you to place orders before Oct 15 2021 to secure shipping before CNY as many suppliers tell us that they will not be shipping between Jan 20 and Feb 16 2022.

Below are some reliable news sources outlining what we have discussed above: 

https://www.bloomberg.com/news/articles/2021-09-28/china-media-say-steps-being-taken-to-cool-prices-energy-update

https://www.scmp.com/tech/big-tech/article/3150472/chinas-power-supply-crisis-puts-squeeze-apples-supply-chain

https://edition.cnn.com/2021/09/28/economy/china-power-shortage-gdp-supply-chain-intl-hnk/index.htmlhttps://www.nytimes.com/2021/09/27/business/economy/china-electricity.html 

https://www.reuters.com/world/china/china-seeks-calm-power-supply-fears-crunch-bites-2021-09-29/

https://www.wsj.com/articles/china-power-outages-pose-new-threat-to-supplies-of-chips-and-other-goods-11632769617

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