The supply chain crisis, explained

Photo: APU GOMES / AFP via Getty Images

You might have heard that people are having a VERY hard time buying stuff right now. Perhaps you have met him, or someone you know has met him, or perhaps you are worried about meeting him in the next few weeks, when your extended network of family and friends. friends will expect you to buy things for them. This barrier to buying products is more officially known as the supply chain crisis, although frankly it’s a pretty pointless name because it doesn’t personally help me figure out what’s going on.

If you feel the same, fear not. I have scanned the murky waters of economic jargon and sales gibberish to try to understand what is going on here.

This crisis has a lot of moving parts, which is why experts like to compare it to things like dominoes, Jenga, Where musical chairs. Here is what really happened. At the start of the pandemic, many manufacturing plants shut down or significantly slowed down production due to coronavirus outbreaks. Between sick workers and mandatory shutdowns, these factories weren’t producing much, so shipping companies cut their hours drastically, assuming there wouldn’t be much need for things to be done in the world anytime soon.

It turns out they were wrong. All of us, loyal consumers, desperate to summon as many items as possible in our lockdown lairs, have overwhelmed the factories with demand. We wanted a sourdough starter, and we wanted it now! The factories tried to increase production, but suddenly the raw materials were impossible to obtain because so much had to be manufactured so quickly. Things on the other end also stopped: unloading, processing and transporting the finished products were all steps carried out by essential workers, whose safety depended on staggered teams, small capacities and sometimes workers. full stops.

Can you guess what led to a shortage? I couldn’t, so I’ll tell you. It’s shipping containers. All those full containers that are in ports and loading docks should have been emptied and taken to the next destination, where they would be loaded with new goods and sent elsewhere. Instead, they just sat there with no one to unpack them. This is where things really imploded, because basically nothing could go anywhere. Raw materials to factories, finished goods to retailers, direct deliveries to consumers: shipping rates skyrocketed because all that was needed to move things was busy holding other things in another port that didn’t. didn’t have enough workers to unload everything.

Because the world never really stops buying things, the problem only got worse. And now here we are, facing the busiest buying season of the year, when what we really need is for everyone to buy as little as possible to help ease the pressure.

Of course, this crisis involves many factors, and the consensus seems to be that basically everything that has happened in the past couple of years and beyond has brought us here. Here’s a fun game to play with your family over the holidays: name a topic and see if you can trace the supply chain crisis. Climate change? Yes, extreme weather conditions cause disruption in the supply chain, and we are having more and more of them these days. Minimum wage? Absolutely: insanely low wages and appalling working conditions are largely to blame for the massive labor shortages. Social media? Uh! Where do you think we want to buy everything that is put in front of our eyes?

Here are a few other more specific entities you can blame on, if you wish:

  • Peloton amateurs: At the height of containment, demand for some very specific products in rich countries exploded: home exercise equipment, bakery supplies, game consoles, offices. The already busy shipping industry has completely exhausted itself and the components needed to manufacture some of these particular products have started to run out. The hope was that factories would be able to catch up once things returned to some sort of normalcy, which of course never really happened. So, yeah, the sourdough bakers are to blame, and also your aunt who keeps talking about how sexy Alex Toussaint is.
  • Covid accumulators: These guys! You know those. Maybe you were. Remember when people used to buy toilet paper in bulk from Amazon? Dark times. This first wave of panic buying, which hit different parts of the world at different times, is what initially put pressure on the global shipping industry.
  • This big boat: Remember Never given? The big, soft boat that got stuck in the Suez Canal, crippling 12% of world trade for six days in a row? Sorry for this boat, but it is also partly responsible for the situation. Because shipping around the world was already so precarious, anything that got it sidetracked, even a little bit, had a massive ripple effect, meaning our well-meaning daughter helped dive the supply chain deeper. in a spiral.

There is some good news. First of all, although experts initially said this could continue until 2023, we appear to have turned a corner across the ordeal, with shipping rates falling and progress being made in ports working on the unloading of cargo. Major retailers say they’re already fully stocked for the holiday season, meaning the wave of gift shopping won’t put further pressure on manufacturing and shipping.

Waiting for, experts say the sooner you order your gifts, the better your chances of getting them in time for the holidays. Electronics is a particularly risky bet, as a massive shortage of microchips is currently affecting everything from cars and televisions to phones and tablets. Retailers favor storing small, pliable, and soft products for this year’s holiday because they are the easiest to pack in shipping containers (reminder: things we don’t have enough of). Headphones, cuddly toys, blankets, slippers, batteries, ponchos, baby clothes – anything that doesn’t take up too much space to ship is your best bet to take the pressure off and find something that arrives ASAP.

Another option is to buy from a store rather than ordering online – that way you have your product on hand instead of relying on a questionable arrival date. Even better? Gift cards or monthly subscription boxes that don’t depend on on-time delivery.

That being said, the less you can buy, the easier it will be for each link in the chain to catch up faster. Even without a supply chain crisis, it’s not a bad time to try buy less overall – mass consumption, from manufacturing to shipping, is a huge contributor to our carbon footprint. Plus, fewer gifts in circulation means you’ll (hopefully) receive a little less junk this holiday season. Pasta of the month for everyone!

PS: If we still have a broken supply chain next year, now is a great time to start a Year Round Gifts section in the Notes app on your phone.

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About Donnie R. Losey

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