European companies: prices up due to shortage of containers and personnel | Financial

This was reported by executives of companies meeting this weekend in the south of France at a conference. They said the problems could continue for a longer period of time.

The bosses of industrial groups such as tire specialist Michelin and building materials producer Saint-Gobain say that in the aftermath of the crisis they are faced with shortages of supplies, problems with transport and shortages of personnel. Companies also expect inflation to increase due to the problems.

sea ​​container

Florent Menegaux, chief executive of Michelin, says the company usually has one, at most two, operational supply problems at a time. “Right now we have 23,” he told Bloomberg TV. “The entire supply chain is disrupted.” Michelin has raised tire prices twice since the beginning of the year, Menegaux said. He also noted that the price of shipping containers between Singapore and the US has risen to about $9800 today from $2400 in 2019. “Ultimately, customers will pay,” he said.

The concerns expressed at the annual conference in Aix-en-Provence clarify the picture that the economic recovery from the crisis is rife with uncertainty. Shops, restaurants and leisure facilities are finally reopening as vaccinations are ramping up across Europe. But the fight against the virus is not going at the same speed in all countries. The fact that vaccination is lagging behind in other countries has repercussions on supply chains. This also makes it difficult for companies to find employees.

Inflation

French Industry Minister Agnés Pannier-Runacher said prices and shipping delays should be closely monitored. “We have a number of factories that have to slow down their production. They have a huge backlog, but they don’t have the parts to produce.”

Isabel Schnabel, member of the Executive Board of the European Central Bank (ECB), pointed out the risks to high inflation in a speech in Germany on Saturday. But price increases may also be necessary after a longer period of weak price increases, she says. Klaas Knot, the boss of De Nederlandsche Bank, fears that the risks of excessive inflation are underestimated. He also doesn’t think inflation will be temporary, as many of his colleagues expect.

–