Inflation and soaring energy prices have dominated since the beginning of the year. The global supply chains are interconnected, when one price soars, others tend to follow. The factors contributing to global inflations are energy, labor, and freight cost. A country’s competitiveness can be impeded by an uncompetitive supply chain price.
The consumer price index (CPI) transportation is widely used as a macro-economic indicator of inflation, and also a tool by the central bank for targeting inflation and monitoring price stability. The European union CPI transportation data have increased by 13 % since May’21, indicating a substantial increase in the transportation cost.
Figure: European Union CPI Transportation
The effect of inflation on the supply chain will lead to an increase in transportation costs going forward. An increase in the cost of transportation will eventually lead to an increase in the price of consumer goods. The increasing price of consumer goods will lead to low demand from the market. The ongoing geopolitical tension, rising energy cost, and shortage of truck drivers are likely to disrupt the supply chain throughout the year.
Program-Director Compounds & Specialties
People and Environment
The circular economy is a hot topic already for the past years, and while different industries are interested in working towards it, many of its principles get lost in translation, unfortunately putting at risk the acceptance, development, and actual implementation of the CE. Standards help address this issue.
June 18, 2022