Consumer shortages offer lessons for the supply chain
The pandemic has included all kinds of unpleasant experiences, including shortages of various commodities, from toilet paper to cars and trucks.
Experts often blame the “supply chain,” which is, quite literally, a supply chain, from raw materials to products on store shelves.
When consumer demand came to life after the pandemic shutdowns, many links in this chain could not handle the stress.
The most immediate effect is higher prices for limited supplies. The Wall Street Journal reports that a growing number of manufacturers are moving away from even basic consumer products, in favor of high-end models that make more money.
There are many moving parts to these supply chain challenges, starting with manufacturers, often in Asia, who make consumer goods. These products are placed aboard a container ship that sails across the Pacific Ocean, typically to the Port of Los Angeles, which absorbs 40% of the country’s container traffic. From there, the products are loaded onto a truck or train and shipped across the United States. Each of these steps is overloaded with work.
To see it in real time, the Marine Traffic site maps all the ships on the planet. Zoom into the Port of Los Angeles and a collection of green circles represents container ships anchored and waiting for a ride to be unloaded.
“We need to see more large retailers and importers diversifying where they bring their cargo,” says Margaret Kidd, professor of supply chain and logistics at the University of Houston. “You can’t bring this volume of cargo in just one port. “
To help reduce congestion, some supply chain experts have suggested that Houston be a destination for some of these container ships.
Over the past few years, the port has certainly captured some of this traffic, but there are other complications to consider. More particularly, the weather.
Container ships, forced to wait in Los Angeles, typically stay anchored for seven to nine days before they can unload.
“If they say to continue the journey through the Panama Canal to Houston for the round trip, it will take more than nine days,” says Chris Tang, professor at UCLA. “Who is going to pay for this?”
On top of that, a trucking and labor shortage is stretched, trying to move goods within the country.
At the moment, some of these additional costs are passed on to consumers. A spokesperson for the Port of Houston said there were efforts to expand container traffic, locally. Still, the challenges are expected to last until next year, or longer, before being resolved.