Self-inflicted shortages of toilet paper aside, Australia has been wracked by waves of shortages throughout the pandemic.
We’re desperately low on workers, timber, vehicle parts, and a whole range of everyday items and don’t even get us started on PlayStation 5s.
We’re not the only ones either. Thankfully, as a fairly isolated island nation, we have solid supplies and manufacturing capabilities for most of life’s essentials but in places like the US and the UK, shortages of food and empty shelves in supermarkets are a reality.
Matthew Hockenberry, Assistant Professor in Communication and Media Studies at Fordham University, New York, jumped on Twitter to explain why the world appears to be running out of everything right now and why it’s so hard to get stuff.
1/ The stories that started appearing over the summer about the state of global supply chains have been ramping up, and I thought it would be worth it to collect some of the articles documenting the disruption/catastrophe/reality of it all.
— Matthew Hockenberry (@hockendougal) September 16, 2021
Hockenberry, who is an expert in supply chains and logistics, has compiled a thread linking to a dozen or so articles detailing separate shortages in global supplies of stuff to highlight the broader issues going on here.
From pipette tips used extensively in medical research, to bicycles, and even — god forbid — craft beer, there are major shortages across the world the likes of which we haven’t seen before in the pandemic.
As it turns out, we weren’t ordering as much stuff in 2020, so the lack of supply caused by shutdowns of manufacturers around the world wasn’t such a big issue. Now that the world is reopening, we’re ordering more stuff but the manufacturing side of things hasn’t yet fully recovered.
That means that the transport networks for getting that stuff to us are overloaded while production levels are still not back to normal, causing a nightmare for international trade.
Take, for example, this piece from Time, in which the author Alana Semuels orders a 4ft stuffed giraffe online in order to explain shipping delays and supply chains.
The giraffe, named Jani, is made in a factory four hours from the port of Qingdao, about halfway between Beijing and Shanghai. From there she made her way to Los Angeles on a shipping container, stopping at four different ports, sometimes for weeks, along the way.
After waiting for a month at the port, Jani was put on a train to Texas and from there on a truck to the business’ warehouse before being ordered and driven back to San Francisco and arriving at Semuels’ door.
All in all, the journey took 106 days and cost US$23.76 to make, US$13.27 to ship, and an untold amount to deliver for which the company charges nothing. All this for a US$116 stuffed giraffe, of which Amazon takes a US$16.19 cut.
Along the way, Semuels details the strains that COVID has placed on the transport industry. Shutdowns in factories in China have meant that shipping container space is now at a premium, with ports scrambling to deal with the backlog of cargo ships piling up at ports around the world. Rising costs of everything has been the result, including labour, packaging, and freighting. All of that has a knock-on effect, raising the cost of Jani by US$29 for the consumer as a result.
5/ They peg the problem to the shipping industry: "For the global economy, shipping is at the center of the explanation for what has gone awry." And it IS the case that shipping is the most proximal cause for supply chain snags.
— Matthew Hockenberry (@hockendougal) September 16, 2021
Hockenberry explains that the shipping network is extremely fragile. The arrival and delivery of different components and products is all carefully mapped in logistical chains, with companies needing to time precisely the availability of different pieces that they need.
Shut downs in places like Malaysia, a country integral to the production of semiconductors, mean eventually companies like Sony run out of the necessary components they need to produce PS5s.
15/ In many respects, the real problem here is uncertainty. After all, logistical time isn't fast, or slow. It doesn't actually matter how long a container ship takes, or how much product is on hand. What matters is that you can predict it. Logistical time is regular, routinzed.
— Matthew Hockenberry (@hockendougal) September 16, 2021
“Modern supply chains are ‘lean’,” Hockenberry explains.
“Excess is inefficient, and costly. But despite calls to ‘resiliency,’ these lean supply chains offer little margin for when things go wrong”.
“Another way to put this is that the pandemic has ‘produced’ uncertainty across the planet, in nearly every sector, across all available means of production and distribution. It has called into question labor pricing, worker availability, and resource management models”.
Because of the increasingly and incredibly complex systems in place required to produce goods in the 21st century, small disruptions can have major knock on effects.
So, What’s Being Done About It?
Well, for starters, Chinese manufacturers are now producing record volumes of freight containers to deal with the backlog. However the issues are more to do with shipping containers being held up at various choke points than it is to do with their availability.
“Shortage is the name of the game, really,” Hockenberry says.
“Shortages in labor, coupled to shortages in containers (both shipping containers and trucking trailers), with efforts to supplement the latter stymied by output volume of some critical materials (including semiconductors)”.
“Even warehouse space is limited, not only because of the pandemic —though the shifts it accelerated in buying habits are a factor — but also because of increased competition (and increasing prices) across the sector”.
In short, there isn’t a whole lot we can do to deal with the mess, as delays in one sector disrupt output in other sectors and the problems cause “feedback loops” or spiraling problems.
Until the world is fully vaccinated, until lockdown measures can be lifted and manufacturers can start working at full capacity again, and until the backlog can be dealt with, were going to keep experiencing these delays.
Hockenberry notes that uncertainty and disruption driven by the pandemic has exposed the fragile and interwoven nature of global trade and shown that even small delays can impact the rest of the world in difficult to predict and even harder to correct ways.
Climate change is only likely to increase these kinds of interruptions, Hockenberry says, with the implication here being that the delays to deliveries, shortages, and a rising cost of production and goods that we have seen during the pandemic could give us a glimpse into the future of what a world wracked by climate breakdown could look like.
While we may be able to get on top of the issues at hand, it’s likely that we will continue to see the present issue frequently down the line.
If you’re interested in supply chain problems — and come on, who isn’t? — Hockenberry has published his own book where you can learn more.
Read more stories from The Latch and subscribe to our email newsletter.
