It’s a story repeated endlessly over the past 20 months. A person stuck at home as the COVID-19 pandemic accelerated decided to buy home workout equipment. Or maybe it was new patio furniture, a cookware set or just a few boardgames to pass the time. Because when you’re not spending money on travel, concerts and theater, you spend it on making yourself comfortable.
So many people went to the internet and shopped, filling an online cart with the distractions and pleasures they wanted. It was fast, satisfying, socially distanced and far too easy — and it was multiplied millions of times. As more people bought, and each of them bought more things, manufacturers, retailers and the shipping companies that connect them struggled to keep up while keeping their workers safe. It was a challenge the supply chain that circles the globe had never seen before. But as consumers fumed over delivery delays, empty toilet paper shelves and “sold out” signs, they didn’t stop shopping.
“The biggest issue has been the unprecedented demand that we’ve seen from people sitting at home and not being able to travel or go to the movies, to basically saying, ‘OK, I’ll spend my money on buying things,'” says Andrew Hwang, the manager of business development with the Port of Oakland. “Maybe it was to make themselves happy or to buy things that they’d put off for years, but it created a big strain on the supply chain globally.”
Over the last 50 years, a complex orchestra of vessels, vehicles and aircraft efficiently moved the things we ordered around the planet. Packed into shipping containers or the bellies of cargo planes, they traveled quickly to our doorstep. It’s how we got our iPhones, household goods, cars and clothing, whether they’re made abroad or just across town. But as it did with so many things, the pandemic walloped the global supply chain and every link in it. Worker shortages, COVID-19 workplace restrictions and an explosive demand for stuff — online shopping grew 20% between 2019 and 2020, according to Mastercard — quickly congested the entire process, leaving ships to wait a week to be unloaded and goods to pile up at ports and other transit points. A system built on globalization but with fixed resources — you can’t expand a port overnight — suddenly became a global problem. Even if the shopping spree eventually wanes, a new kind of supply chain, like one that covers shorter distances, is likely to develop.
“Sometimes in our lives, we forget how big the world is,” Hwang adds. “We forget how tied and interconnected we are. And for the things that we like and we want to have, much of it comes from other places thousands of miles away.”
Coming up on two years since the first coronavirus cases were reported in China, the congestion continues. Online freight marketplace Freightos says ocean freight from Asia to the United States now takes an average of 69 days, or almost double what it took a year ago. And according to Drewy, a maritime consulting firm, the cost of shipping a 40-foot container from Shanghai to Los Angeles is now $11,362, triple what it cost last year. As new variants make it difficult to forecast working conditions or consumer behavior, the global supply chain is expected to remain in flux for months to come.
It’s enough of a problem that the federal government has noticed. In February, President Joe Biden issued an executive order asking the secretary of commerce to identify supply chain risks for critical items like semiconductors and electric vehicle batteries, both of which are in short supply. Biden’s goal: to get more goods — though admittedly not all — made in America. And in July, the White House appointed a special envoy on port congestion to its previously announced Supply Chain Disruptions Task Force.
“[So we’re] looking to identify very specific gaps and figuring out the best way to go about creating resilient supply chains,” Celeste Drake, the administration’s Made in America director, told CNET’s Connie Guglielmo and Maggie Reardon last month. “This is not about bringing every far-flung supply chain to the United States.”
Bill Reinsch, a senior adviser at the Center for Strategic and International Studies, sees Biden’s policies aligning with industry trends toward simplifying and shortening supply chains and building redundancies into them. “The argument is not just, ‘You know, we want to make it here because it’s nice,'” he says. “We want to make it here because these areas are critical to our security. And we need to have confidence that we can have adequate amounts of this stuff, like batteries and critical minerals, when we need them.”
Source: CNET.COM
