In light of global supply chain challenges facing our industry and our livelihoods, GNP Branded Gear will be regularly updating our blog with current supply chain issues and their impact on our industry.
Update: A brewing global energy crisis
A surprisingly strong rebound in Asian manufacturing as strong demand for goods from developed countries (think government stimulus and roaring capital markets), coupled with minimal investments in coal production over the past decade have tripled coal prices in the last 12 months. In China and India power plant rates are set by government panels. They are either running out of coal or choosing to shut down rather than operate at a loss as their costs skyrocket.
China’s dispute with Australia over its announcement to purchase nuclear powered submarines from the United States has exacerbated the situation. Historically, 40-50% of China’s coal imports came from Australia but those have been cut to zero over the political dispute.
How is this affecting GNP?
All of our vendor-partners factories are currently fully operational and have implemented plans to continue producing at their industry-leading production times despite the energy shortages and global supply chain issues. After studying the situation in collaboration with our vendor partners and their offices across Asia. We have drawn the following conclusions for our business and industry:
- Most if not all of GNP supplier-partners’ manufacturing facilities are in industrial parks. They employ large numbers of people, which are less likely to have power cuts than other areas.
- Our vendor-partners have shown enormous resilience purchasing and installing diesel generators to allow for continuous operations despite power cuts.
- Factories are reworking their labor schedules across facilities. Operating 24 hours/day when they have power and then rotating staff to other locations when they do not.