US supply chain woes to stretch into 2022, warns transport chief

Trucks wait in line at the Port of Los Angeles in San Pedro, California. (Photo by Robyn Beck / AFP)
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Trucks wait in line at the Port of Los Angeles in San Pedro, California. (Photo by Robyn Beck / AFP)
In this aerial file photo taken on October 14, 2021, trucks transport cargo containers at the Port of Baltimore in Baltimore, Maryland. (Photo by Brendan Smialowski / AFP)
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In this aerial file photo taken on October 14, 2021, trucks transport cargo containers at the Port of Baltimore in Baltimore, Maryland. (Photo by Brendan Smialowski / AFP)
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Updated 18 October 2021

US supply chain woes to stretch into 2022, warns transport chief

In this aerial file photo taken on October 14, 2021, trucks transport cargo containers at the Port of Baltimore in Baltimore, Maryland. (Photo by Brendan Smialowski / AFP)
  • Pete Buttigieg says the supply side crunch was being exacerbated by extraordinary pent-up demand

WASHINGTON: The US transportation secretary on Sunday warned that America’s supply chain woes including clogged ports will drag into next year, potentially cramping the upcoming holiday shopping season in the world’s largest economy.
Pete Buttigieg did the rounds on US political talk shows to stress that President Joe Biden’s administration was doing everything it could to alleviate congestion at the country’s overloaded ports, railways and roads, and that the government will “re-evaluate all of our options” to relieve the bottlenecks.
But “a lot of the challenges that we have been experiencing this year will continue into next year,” the transport chief and former presidential candidate told CNN’s “State of the Union” show.
Buttigieg added that the supply side crunch was being exacerbated by extraordinary pent-up demand in the United States.
“Demand is off the charts, retail sales are through the roof,” he said, and the country’s transportation and shipping infrastructure has been unable to keep up.
With the Christmas holiday season gearing up as America’s coronavirus-battered economy rebounds, US retailers are taking unprecedented steps to try to navigate around myriad supply chain obstacles.
Biden recently announced a commitment by the Port of Los Angeles to begin 24-hour operations in an effort to ease congestion which has seen multiple cargo ships anchored off the coast awaiting opportunities to unload.
Analysts have pointed to knock-on effects through the US economy.
Allianz chief economic adviser Mohamed El-Erian, speaking to “Fox News Sunday” about the supply chain crunch, called it “the everything shortage.”
“Things will get worse before they get better,” he said. “So we’re going to have more shortages of goods, we’re going to have higher prices, inflation will remain in the four-to-five percent level. And it’s just going to take time to sort these things out.”
Congress meanwhile is grappling with passing two huge portions of Biden’s domestic agenda: a $1.2 trillion infrastructure bill to upgrade roads, bridges and ports, and his even bigger Build Back Better social spending program.
“We’ve got to get this done,” Buttigieg said on NBC’s “Meet the Press.”
The infrastructure bill has bipartisan support. But the massive package that expands the social safety net and addresses the climate crisis faces opposition from within the president’s own Democratic camp as well as from Republicans, pushing Biden to consider paring it back.


SISCO’s subsidiary LogiPoint acquires Elite Group

SISCO’s subsidiary LogiPoint acquires Elite Group
sisco.com
Updated 12 sec ago

SISCO’s subsidiary LogiPoint acquires Elite Group

SISCO’s subsidiary LogiPoint acquires Elite Group
  • The transaction is to be funded through bank financing and direct cash investment

Saudi Trade and Export Development Co. (LogiPoint) has acquired Elite Group through Green Dome Investments LLC, according to a bourse filing by its parent Saudi Industrial Services Co. 

The transaction was concluded on Nov. 25, with LogiPoint’s investment in Green Dome valued at SR58 million ($15 million).

SISCO expects the impact of the transaction to be shown in the consolidated financial statements of the fourth quarter of 2021, through LogiPoint.

The transaction is to be funded through bank financing and direct cash investment. 

Elite Group is an integrated land freight and courier solutions provider in the region. 


Bahrain outlook improves on fiscal reforms, S&P says

Bahrain outlook improves on fiscal reforms, S&P says
Image: Shutterstock
Updated 39 min 17 sec ago

Bahrain outlook improves on fiscal reforms, S&P says

Bahrain outlook improves on fiscal reforms, S&P says
  • The agency said it expects the government to benefit from additional financial support from its Gulf neighbours

S&P Global Ratings has revised Bahrain's outlook to 'stable' from 'negative' on the back of new fiscal reforms aimed at improving non-oil revenues and cutting state spending, the ratings agency said in a statement.

Rated below investment grade, Bahrain was bailed out to avoid a credit crunch in 2018 with a $10 billion package from wealthy neighbours, Saudi Arabia, Kuwait and the United Arab Emirates.


That money was linked to a set of fiscal reforms, but after the coronavirus crisis strained its finances, Bahrain in September postponed plans to balance its budget by two years and announced plans to increase a value-added tax.


"The Bahraini government recently announced additional fiscal reforms to strengthen non-oil revenue and rationalize expenditure. These measures, along with the more supportive oil price environment, should improve the sovereign's fiscal position", S&P said in a statement this weekend.


The agency said it expects the government to benefit from additional financial support from its Gulf neighbors, if needed.


Bahrain will double value-added tax to 10 percent next year, a move which S&P estimated could contribute receipts of about 3 percent of gross domestic product in the next few years, up from about 1.7 percent this year.


The Gulf state is also planning to rationalize operational government expenditure and social subsidies in 2023 and 2024, a move which shifts the focus of its reforms more on the spending side than on raising non-oil revenues.


"We believe there is higher implementation risk in expenditure rationalization as the delicate political and social environment on the island, which has constrained the government's efforts, persists", S&P said.


Bahrain has in the past backtracked on some reforms as its Sunni Muslim rulers feared that austerity moves would bolster the majority Shi’ite-led opposition and stir more of the unrest that rattled the country since the 2011 Arab Spring uprisings.


How Omicron is affecting Middle East markets

How Omicron is affecting Middle East markets
Image: Shutterstock
Updated 53 min 16 sec ago

How Omicron is affecting Middle East markets

How Omicron is affecting Middle East markets
  • Oil prices stumbled in their biggest decline since April 2020

DUBAI: The new COVID-19 variant, Omicron, has prompted global economic concerns, as fears of its spread begin to affect stock markets and oil prices. 

Saudi Arabia’s main market, the Tadawul All Share Index, opened 5.3 percent lower on Sunday, trading near 10,700 points. 

The Dubai Financial Market was down 8.49 percent.

Oil prices stumbled in their biggest decline since April 2020, with Brent prices dropping 11.55 percent to $72.72 per barrel when markets closed on Friday, while WTI slid 13.06 percent down to $68.15 per barrel.

The variant was first discovered in South Africa and had also since been detected in Belgium, Botswana, Israel, the UK, Australia and Hong Kong.

Within the Middle East Israel is the only country to have reported a case of the new variant so far, but some governments in the region have issued travel curbs to prevent the virus from spreading. 

On Sunday, Saudi Arabia expanded the list of African countries where it barred travel because of Omicron, adding Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros Islands.

The Kingdom earlier halted flights to and from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Eswatini.

Other Middle East countries, including the UAE, Bahrain, Morocco, and Jordan have issued similar measures. 


Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi stock market drops 5.3 as Omicron sparks global concern
Updated 53 min 1 sec ago

Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi Arabia’s main market, the Tadawul All Share Index, opened 5.3 percent lower on Sunday, trading near 10,700 points.


Aramco prepares work on its largest non-associated gas field

Aramco prepares work on its largest non-associated gas field
Updated 28 November 2021

Aramco prepares work on its largest non-associated gas field

Aramco prepares work on its largest non-associated gas field
  • The Saudi-listed firm claims it to be the “largest non-associated gas field” in the Kingdom

DUBAI: Saudi Arabia’s oil giant Aramco is marking the start of its development of the Jafurah unconventional gas field on Nov. 29. 

The Saudi-listed firm claims it to be the “largest non-associated gas field” in the Kingdom. 

The move is part of the Kingdom’s push to commercialize its unconventional resources and expand Aramco’s integrated gas portfolio.