China and Europe witnessed worst floods in 1000 years thereby disrupting the global supply chain

Global shipping had already been suffering from disruptions arising from COVID-`9; however, the floods all across Europe and China have exacerbated the situation. As soon as the countries started showcasing demand for products, the rising expenditure led to a shortage of containers which ended up delaying the delivery and rose the prices. Back in April, one of the largest container ships got stuck in the Suez Canal, which resulted in a traffic for nearly a week. The waterway is known to be one of the busiest in the world, with more than 12% of the world trade passing through the canal. In June, a slight rise in the COVID-19 cases in southern China resulted in even more delays at ports in the region, which shot up the shipping prices.

Now, the once in a millennium rainfall and flooding have devastated Germany, Belgium, Poland and some other parts of Western Europe. Some parts of Luxembourg, the Netherlands, and Switzerland, also recorded heavy rainfall causing minimal damage. The calamities are exacerbating the situation and are expected to disrupt the supply chain as the railway links between these major economies has got broken. One expert stated that the railways coming from Slovakia and Czech Republic into the German ports have been severely disrupted causing the region millions of dollars. The end result may ultimately have negative effects on industries such as the domestic appliances, motor industry, and others.

It is accompanied by the flooding and supply chain disruption by the flooding in Chinese province of Henan. The situation got worse as the region and province is landlocked. As a result of this, Goldman Sachs has decided to downgrade the Chinese education stocks and forecast that the market will decline significantly. The supply chain disruption caused by railways is another major impact. All of this, is expected to lay impact on the shipping, thereby forcing the prices to increase substantially.