Thai Floodwaters Are Gone…Supply Chain Issues Remain…Recovery is Months Away…Rainy Season Begins Again in Four Months
Disasters are so interesting…we hear about them during the urgent response phase and then they fade away from view. And many of us think the issues have been resolved. Actually, that is seldom the case. The floods in Thailand are a good example. The floodwaters receded weeks ago from the sprawling industrial zone, but the streets are littered with debris, phones don’t work and rusted machinery has been dumped outside warehouses. Production has ground to a crawl with no sign of returning to “normal” in the near future.
The slow recovery is having global consequences. Before the floods, Thailand produced about 40 percent to 45 percent of the world’s hard disk drives, the storage devices of the digital age. It is now becoming clear that it will be months – that’s right months – before production of hard drives returns to pre-flood levels. This is significantly longer than anyone had imagined. This will likely result in prolonged period of higher prices for hard drives for consumers worldwide. In the United States, certain models are currently 40 percent to 50 percent more expensive than before the floods, prices that may remain high for several more months.
Time will tell as how quickly the country and companies recover. And oh by the way, the impending rainy season is only a short four months away.