The pandemic in general? Trans-pacific shipping got completely blown up (on both ends) multiple times since Feb/March 2019.
Already while COVID was largely confined to China, supply problems were beginning to emerge, starting with China factories shutting down and internal networks (trucking) being disrupted by the pandemic and lockdowns. Everything just compounded from there. I remember reading daily posts on a supply chain subreddit talking about shipping indexes dropping daily in March.
Like honestly, it's pretty amazing that shortages aren't worse. Perhaps a testament to how much of our trade is in non-critical goods.
Also, a lot of suppliers and shipping companies are trying to recoup their covid losses from 2020. They have increased their service costs, which causes the next guy in the chain to increase their costs, etc.
Well the business case as of late is that the global supply chain isn’t as resilient as previously believed, with all of the disruption seen during covid. Primarily with surgical masks and medical equipment at first, but now with nearly every good experiencing disruptions of some sort.
Shipping is totally fubar right now. West coast ports like Long Beach were jammed up as ships carrying PPE were prioritized and longshoreman were sidelined by quarantine and infection.
Part of my business is a logistics operation... post-Christmas we were hobbled, I lost 30-40% of manhours any given week and the customers on the other side were the same way. I had to cut throughput 50-60% and overcommit staff to do what I needed to do. Inventory on hand is 10x what it should be.
So I would guess that a lot of the container issue is inventory stuck in the channel. Even companies like Walmart are struggling to keep shelves stocked, and they have a world class, vertically integrated operation.
There's an additional article that was on here the other day, that says there's a world-wide shipping problem.
Many containers are abandoned in countries that aren't on major routes because they took PPE to those countries, but never bothered to bring the empty containers back.
Also lots of boats moored off the US East and West coasts, plus Europe, waiting of loading/unloading because of delayed supply chains due to COVID.
It's a butterfly or ripple effect of high optimized supply chains being affected by small changes caused by nature/the government throwing a virus shaped spanner in the works.
Globalized supply chains have been devastated by the pandemic. Large numbers of shippers are projected to go bankrupt because their loads have plummetted.
It seems to me like the problem is just that supply chains aren’t legible. I forget where I read this from, but Walmart or Amazon would easily pay billions of dollars to know which shipments won’t arrive over the next few months because of the rolling wave of factory shutdowns.
Once you have that legibility, the extra step of snipping the globalized supply chains seems unnecessary. Some businesses will plan to maintain continuity with all international shipping stopped, and a few will receive subsidies and mandates to do so. Others won’t, and that’s fine too; there’s a ton of value in making our lives better even in ways that can’t be sustained during a crisis. (It’s worth noting that international shipping in everything but coronavirus-fighting medical equipment hasn’t stopped during the currrent crisis.)
What's the current prognosis for supply chains returning to stability?
The last I heard, the main culprits were (a) COVID shutting down Chinese factories; (b) cargo-ship related shipping delays; (c) COVID-related demand for work-from-home electronics; and (d) follow-on problems caused by hoarding.
My impression was that (a, b, c) are largely behind us now. Does that mean we just need to give things a little time?
We may soon have the opposite problem, no goods and parts being shipped because factories in South Asia are having to shut down because their workers are not vaccinated and Delta is spreading:
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