Nobody Should Be Supplies By This

It's becoming increasingly clear that COVID-19 broke the global "just in time" supply chain, and that things aren't going to be fixed anytime soon without, say, major infrastructure investments, and major pay hikes by logistics companies always looking to cut costs.

Like toy blocks hurled from the heavens, nearly 80,000 shipping containers are stacked in various configurations at the Port of Savannah — 50 percent more than usual.

The steel boxes are waiting for ships to carry them to their final destination, or for trucks to haul them to warehouses that are themselves stuffed to the rafters. Some 700 containers have been left at the port, on the banks of the Savannah River, by their owners for a month or more.

“They’re not coming to get their freight,” complained Griff Lynch, the executive director of the Georgia Ports Authority. “We’ve never had the yard as full as this.”

As he speaks, another vessel glides silently toward an open berth — the 1,207-foot-long Yang Ming Witness, its decks jammed with containers full of clothing, shoes, electronics and other stuff made in factories in Asia. Towering cranes soon pluck the thousands of boxes off the ship — more cargo that must be stashed somewhere.

“Certainly,” Mr. Lynch said, “the stress level has never been higher.”

It has come to this in the Great Supply Chain Disruption: They are running out of places to put things at one of the largest ports in the United States. As major ports contend with a staggering pileup of cargo, what once seemed like a temporary phenomenon — a traffic jam that would eventually dissipate — is increasingly viewed as a new reality that could require a substantial refashioning of the world’s shipping infrastructure.

As the Savannah port works through the backlog, Mr. Lynch has reluctantly forced ships to wait at sea for more than nine days. On a recent afternoon, more than 20 ships were stuck in the queue, anchored up to 17 miles off the coast in the Atlantic.

Such lines have become common around the globe, from the more than 50 ships marooned last week in the Pacific near Los Angeles to smaller numbers bobbing off terminals in the New York area, to hundreds waylaid off ports in China.

The turmoil in the shipping industry and the broader crisis in supply chains is showing no signs of relenting. It stands as a gnawing source of worry throughout the global economy, challenging once-hopeful assumptions of a vigorous return to growth as vaccines limit the spread of the pandemic.

The disruption helps explain why Germany’s industrial fortunes are sagging, why inflation has become a cause for concern among central bankers, and why American manufacturers are now waiting a record 92 days on average to assemble the parts and raw materials they need to make their goods, according to the Institute of Supply Management.

On the surface, the upheaval appears to be a series of intertwined product shortages. Because shipping containers are in short supply in China, factories that depend on Chinese-made parts and chemicals in the rest of the world have had to limit production.

But the situation at the port of Savannah attests to a more complicated and insidious series of overlapping problems. It is not merely that goods are scarce. It is that products are stuck in the wrong places, and separated from where they are supposed to be by stubborn and constantly shifting barriers.

The shortage of finished goods at retailers represents the flip side of the containers stacked on ships marooned at sea and massed on the riverbanks. The pileup in warehouses is itself a reflection of shortages of truck drivers needed to carry goods to their next destinations.

 

Basically everything that could have gone wrong with supply chain management in the last 20 months has gone wrong: retirements of experienced ship captains and truckers, necessary pandemic regulations, all the slack ruthlessly burned out of the supply chains, overworked everybody, very real and very pressing climate change concerns, and rapidly increasing demand as global economies come out of hibernation.

All that is too much for the current system to handle, and it's broken, very possibly beyond repair.

The question now is what replaces it, and how much it's going to cost the globe.