Transport disaster strikes Black Friday procuring amid Europe, China floods

TOPSHOT – The aerial photo shows an area in the Blessem district of Erftstadt on July 16, 2021, which was completely destroyed by the flooding.

SEBASTIEN BOZON | AFP | Getty Images

The 2021 Christmas shopping season could be marred by out of stock goods and shipping delays as the recent floods in Europe and China tighten already tight global supply chains.

Western Europe and the Chinese province of Henan – a major transport hub and headquarters of several large companies – are grappling with the aftermath of devastating floods.

The disasters damaged railways in both regions, which are used to deliver goods and raw materials. Water entered industrial areas and damaged facilities, machinery and warehouses, supply chain industry companies told CNBC.

“Black Friday and the holiday season for which products (and raw materials) are staged will have the brunt of the impact,” Pawan Joshi, executive vice president of supply chain software company E2open, told CNBC in an email.

“Consumer electronics, dorm furniture, clothing and appliances will all continue to be in short supply as shopping starts early in school and enters the main Christmas shopping season,” he said.

Delays in the distribution of raw materials needed to manufacture goods will have a cascading effect and disrupt supply chains “for weeks and months,” Joshi said.

The flood has the potential to take another blow to the auto industry, which is already suffering from a semiconductor shortage.

Pawan Joshi

Executive Vice President, supply chain software company E2open

Several companies including Germany’s largest steel manufacturer Thyssenkrupp, have declared force majeure. A force majeure event occurs when unforeseeable circumstances, such as natural disasters, prevent a party from fulfilling its contractual obligations and release it from sanctions.

Some of the industries hardest hit by the floods include automobiles, technology and electronics, according to those CNBC spoke to.

Car production started again after lack of chips

Auto production is likely to be affected by production delays as many of the world’s largest automakers and their suppliers are based in the flood-ravaged regions.

“The flood has the potential to take another blow to the auto industry, which is already suffering from a semiconductor shortage,” said Pawan.

Production facilities in Germany, the Netherlands, Luxembourg and Belgium are expected to bear the brunt of the flood damage, supply chain risk management company Everstream told CNBC via email. Many suppliers that provide specialty parts for the automotive, technology and aerospace industries are based there, said Shehrina Kamal, vice president of Intelligence Solutions at Everstream.

“When the floods receded, most major highways and roads were expected to be cleared this past weekend,” she said.

“Given that some companies have issued profit warnings and even declared acts of God, the effects of the flood are likely to drag on through supply chains for several weeks,” concluded Kamal.

Zurich-based company Klingelnberg, which makes transmission components, warned that the damage to its Hückeswagen plant in Germany could affect its sales targets for 2021.

Disruption of copper is bad news for electronics

The floods could also disrupt supplies of copper, which is used in many products from electronics to electric vehicles.

Flood-hit Henan Province in China is a major center of copper production, said Vivek Dhar, a commodities analyst with the Commonwealth Bank of Australia.

Copper prices rose sharply last week on delivery concerns, he said, as Henan has seen strong growth in copper smelting in recent years.

“Hopes for copper demand are linked to the rebuilding of damaged infrastructure in central China. China’s electricity sector is a particularly strong driver of copper demand,” Dhar wrote in a note last week.

In Europe, Aurubis GmbH – a provider of high-precision copper wires for the electronics and electrical appliance industries – declared force majeure in the case of deliveries after extensive floods in their plant, according to Everstream Analytics.

Read more about China from CNBC Pro

Meanwhile, in Henan’s capital, Zhengzhou, the disruption could hit a wide range of industries, from automotive to pharmaceuticals to biotechnology, said Ryan Seah, APAC intelligence analyst at Everstream.

“Zhengzhou is a major transportation hub and one of the most important cities in China along the Belt and Road Initiative,” said Seah, referring to China’s gigantic infrastructure plan that spans several countries and continents. He added that the city is home to 91 China-listed companies and a variety of sectors.

There is also a large factory in Zhengzhou, which is made by Hon Hai precision industry, also known as Foxconn. It is the world’s largest assembly plant for Apples iPhones. Foxconn previously told CNBC that it “has activated an emergency plan for flood protection measures at this location”.

Group raises cash to repair Springdale volunteer medical clinic destroyed by flash floods

SPRINGDALE, Utah – A lot can happen in a week, as Michael and Helen McMahan can attest.

The couple have volunteered at the Zion Canyon Medical Clinic for years. Instead of treating injured hikers for the past week and getting changed, they had to examine the clinic’s building, which was badly damaged by the historic flash floods that swept through the city on June 29.

The clinic closed this week and the McMahans say they should have turned people away.

On Thursday from Zoom, Helen walked through the clinic and showed what they have fixed so far.

She aimed the cell phone camera at gaping holes in the floor from which boards were being torn.

“Here’s our new floor,” she said of the exposed wood that covered other areas of the floor. She moved the phone closer to the holes, exposing the dirt underneath. “You can see the mud drying down there.

The look in the middle of renovation is a far cry from where the building stood more than a week ago, when stone, rubble, mud, and rain tore through Springdale and Zion National Park, and streets, shops, and buildings like Zion Canyon Medical Clinic damaged.

Video shows the water Sweep away vehicles in the parking lot and a shed behind the clinic that housed medical supplies.

The couple learned that the insurance did not cover a single penny of the damage to the clinic.

“We estimate probably $ 50,000. We do a lot ourselves. And where are we?” McMahan asked, looking around and examining the work. “We estimate maybe a quarter of the way to get the repairs done.”

Springdale Mayor Stan Smith also showed Zoom where things were in town more than a week later. It began in front of the medical clinic, in the now tidy parking lot of the town hall and the community center.

Then he moved on to companies like Cable Mountain Lodge, which he thought didn’t take as much damage as was initially thought.

Related: The cleanup could take weeks after the flash floods hit southern Utah

After the short drive down the street to Zion Canyon Campground and RV Park, Smith explained that the campground is fully open again and that even the pool – which was filled with mud a week ago – is working again.

But the lodge, which is on the same property as the campsite, is still a total write-off and needs to be demolished.

Smith pointed out temporary container-style buildings that now serve as campground offices.

“He brought these containers with him so he could have a job,” he said as he walked around the parking lot of business owner Stewart Ferber’s Zion Canyon Campfire Lodge. “And that’s probably where he’ll be working now and for the next … until he decides what to do with this building.”

Related: Springdale hopes for disaster relief with estimated damage in the millions

Smith stated that they are still hoping for state or federal help, but that relief is months away at best.

“That’s kind of what we’re trying to go through is what is insurance covered? What are the actual dollar amounts?” he explained.

The community has now gathered around the Zion Canyon Medical Clinic. raise most of the $ 50,000 in just over a week– prove to the McMahans what can happen in a week if people pull together.

“We even had a visitor who was seen that morning of the disaster and she saw the GoFundme and contributed to it,” said Helen. “And also left us a very nice compliment.”

“The community has developed a lot, otherwise we would have gone out of business,” repeated Michael. “And we can’t thank them enough. It was just a fantastic response.”

Two Lafayette women increase cash for Lake Charles floods

Two of Lafayette’s youngest residents opened a lemonade stand today to raise a little extra cash.

But sisters Caroline and Maria thought of the people in Lake Charles who have been through so much lately.

“We thought we just wanted the money for ourselves,” says Maria. “But then we thought about the people of Lake Charles, how they’re feeling right now. And we thought if we sent them some money to build up a bit, they’d be pretty happy.”

The girls say they did quite a brisk business at their booth today.

Caroline said they really enjoyed setting up their stand, making the lemonade, and selling it to their customers.

Her grandmother called KATC to tell us what they were doing and Maria said a television interview about her booth was “unexpected”.