Welcome to the Weekly Scan. Here’s what we’re following for the week of March 29, 2021.
Root Canal. A 224,000-ton ship the size of New York’s Empire State Building was freed on March 29 after being stuck in Egypt’s Suez Canal for nearly a week, blocking one of the world’s most important waterways for shipping and oil. After running into strong winds and a sandstorm, the container ship known as the Ever Given, became lodged in sand and mud at an angle across the canal. The 1,300 foot long ship is twice as long as the Suez Canal is wide. Dredgers worked to free the ship in coordination with assistance from high tide. The vessel is operated by Taiwan’s Evergreen Marine Corp.
- The takeaway: The shipping of critical cargo, such as oil, is expected to resume. Every day, approximately 30% of the world’s shipping container volume, worth about $9 billion, travels through the Suez Canal. The canal is also used to transport 12% of all goods globally. The jam left at least 160 ships waiting to enter the Canal, and many vessels are now traveling around Africa’s Cape of Good Hope, a much costlier and more time-consuming alternative.
Destination: vaccination. The Biden administration is reportedly collaborating with private companies to develop “vaccine passports” that would allow people to prove that they’ve been vaccinated against Covid-19. The administration is looking to make a passport that can be easily accessed with a smartphone or printed on paper, similar to an airport boarding pass. This effort would correspond with President Biden’s push to reopen much of the country by July 4, 2021.
- The takeaway: Mass vaccination against Covid-19 is thought to be the most effective route to return to normalcy, allowing businesses to reopen. A vaccination passport would allow businesses to ensure that customers and employees are protected against the new coronavirus. Some businesses, including cruise ships and sports teams, have already said that they would require proof of vaccination from customers before opening for business again.
Unemployment numbers look sunnier. The U.S. Department of Labor announced on March 25 that new weekly unemployment claims have fallen to their lowest level since the beginning of the pandemic, which began in March, 2020. Across the country, a total of 657,000 people filed for state unemployment benefits last week, a decrease of 100,000 people from the previous week. Last spring, the U.S had its highest unemployment rate since the Great Depression. In April, 2020, unemployment in the U.S. reached 14.8%, but has since dipped to 6.2% as of February, 2021.
- The takeaway: The improvement in unemployment numbers could be an indication that the economy is recovering from the pandemic, in response to more vaccinations, the reopening of businesses, and the $1.9 trillion American Rescue Plan. Bank of America reportedly predicts that the economy will gain 950,000 jobs per month in the second quarter of 2021, with unemployment falling to 4.7% by the summer. The Federal Reserve has indicated that it does not plan to increase interest rates any time soon, in an effort to give room for the economy to slowly recover.
China rags on H&M. Chinese officials attacked Swedish clothing retailer H&M last week, for a statement H&M put out six months ago, condemning alleged forced labor in the production of cotton from the Xinjiang region. The statement, which went unobserved until Chinese social media users took notice recently, says it will not tolerate criminal labor practices in the manufacturing supply chain of its clothing. Sports apparel companies Nike and Adidas have similarly boycotted Xinjiang cotton in their products. China has reportedly detained Uyghurs, as well as other ethnic Muslim minorities, forcing them to work in Chinese factories and cotton farms. China has argued that it has not violated any human rights, and that boycotts have damaged China’s reputation.
- The takeaway: China has increasingly retaliated against companies and other organizations that are critical of its policies, forcing them to choose between politics and the enormous size of the Chinese market. China is reportedly H&M’s second-biggest market, with 505 stores in that country generating $1.2 billion in sales in 2019. Chinese e-commerce platform Taobao reportedly dropped H&M from its offerings. In response to the criticism, H&M reportedly removed its statement about Xinjiang cotton from its corporate website, as have other large brands including Inditex, the parent company of Zara.
Find out what we covered in last week’s Scan.