A silent panic covers the U.S. as shelves in local retail stores run low, empty and with some items requiring a waitlist to access them—with many Americans reporting that they this past weekend had a difficult time finding some items.
In one of its branches, Burger King ran out of potatoes and had to put a notice up telling customers that all orders would be completed without fries— “we have no potatoes”. Medical labs alike are out of essential supplies such as pipettes and Petri dishes.
The current supply has pushed Americans to buy and hoarding household supplies such as paper towels. A situation very reminiscent of when Covid-19 hit last year, the fear of the unknown making an already bad situation worse.
And though the supply crisis is just now garnering attention, it has been seething ignored for months and just recently erupted. Images have surfaced showing dozens of images of dozens of cargo ships backed up off the coasts of some of the largest ports.
With its ports clearing 40 percent of all shipping cargo, California is experiencing the most significant holdup. Numerous ships wait at their ports waiting in the ocean to dock and unload their cargo, which takes longer than expected.
As experts anticipate, the holdup will spread to other ports, the question of “how did we get here” lingers. The Covid-19 pandemic has been linked to the current supply chain issues. Americans were afraid of coming into contact with people, and the stay-home order compounded and altered the consumer behavior of Americans—trading.
Americans were stuck at home, saved on movie theatre and restaurant expenses, and instead went on a spending binge to buy items online. It is no surprise then that there was a significant rise in imports. And by August, inflation-adjusted spending on goods went up 14.5 percent, compared to the pre-pandemic 2 percent. Imports have now overwhelmed American ports, warehouses, and transport systems.
And with the supply system designed to only handle a certain capacity at different times of the year, the overbuying by American shoppers had shot the system.
“We’ve spent decades optimizing supply chains to carry a very specific amount of cargo during very specific times of the year across very specific times of the year across very specific modes of transportation,” said Nathan Strang, an ocean trade logistics at the supply chain tech and consulting firm Flexport, to state.com.
On top of that, there has been a shortage in labor supply in America. The shortage is hitting retail stores such as grocery stores, manufacturing companies and shipping.
So even though orders do reach the American shores, there aren’t enough trained employees to handle the influx of goods, causing the cargo backup that we are currently witnessing at the moment.
Another contributing factor to the holdup is the surging oil prices—a barrel is currently going for $100. With the shipping costs and the appreciation of oil prices, goods are taking a lot longer to get on shelves and are costing a lot more.
With the mega Christmas shopping spree looming, eyes are turned on President Joe Biden. On Wednesday 13 October, Biden laid out plans “to save Christmas,” has reached an agreement to keep several ports, including Port of Los Angeles, operating 24 hours a day, seven days a week.
“By increasing the number of the late-night hours of late-night hours of operation and opening up for less crowded hours when the goods can move faster, today’s announcement has the potential to be a gamechanger,” President said in his speech on Wednesday.
However, despite the Biden administration working to address bottlenecks at the ports, the administration also recognizes that there is still more that needs to be done to resolve the supply chain crisis cutting through all sectors. On matters of transportation and labor shortage, the government has little it can do, and for that reason, Biden has asked retailers and shipping companies to “step up as well.”
And with the greater number of goods coming from outside the country, Biden said, “We need to invest in making more of our products right here in the United States.” He further added, “Never again should our country and our economy be unable to make critical products we need because we don’t have access to materials to make that product.”