No one saw this coming.
Warehouses everywhere are overflowing with packages waiting to be delivered.
It’s not like they still hadn’t been made.
They are here; they are just not going anywhere, at least not anytime soon.
Given that the delivery window has been stretched from days to weeks, or even months.
We know COVID is to blame, for the most part.
But let’s be honest, COVID is not the only reason for our current chaos.
Labor Shortage
It is a worldwide issue.
Vietnam is now the second largest supplier of shoes and apparel, following China.
With removal of lockdown restrictions, factories are reopening there.
But workers are reluctant to go back to work.
Not just for the fear of the virus.
It’s also the emotional trauma caused by the previous lockdowns.
But most importantly, the lack of social security support and trust in the system.
They don’t feel protected.
So they would rather go back to farm lands, as opposed to the cities where factories are mostly located.
Now let’s veer to the other side of the Pacific, an increasing amount of job quitters since September.
Difficulty in finding childcare, low wages, unpleasant working conditions and all contribute to this situation.
Power Shortage
It’s a China issue.
China is the first manufacturing power that has recovered from the pandemic.
But it seems to be in no rush to ramp up production.
Instead, it is taking the time of its own for house cleaning.
That includes capping on carbon emissions.
The Middle Kingdom has always been dependent on coal for energy.
So naturally, electricity consumption has to be cut back on.
On top of that, coal is in short supply.
Factories have no choice but to scale back on production and reduce work hours.
Keep in mind that China is the World’s Factory.
One can only imagine how that would impact global supply chain.
Container Shortage
it’s a logistical issue.
Your product might be able to make it out of the factory.
But it doesn’t mean it can sail off the shore.
The pandemic has not only made people stuck.
Containers, too.
Those that carried goods to the west can’t be transported back in time for the next round.
So this container fiasco happens.
On one end at the port of Los Angeles, containers sit stacked on one another.
On the other at the Shanghai Port, people are scrambling for just one to get their order shipped.
Shipping fees skyrocket as manufacturers have to compete for their goods to go.
That explains the global inflation as well.
It is not just manufacturing that costs, but also logistics.
Truck Driver Shortage
It’s still a logistical issue.
Congratulation, if your order finally got shipped off the Far East.
But your nightmares may not be over yet if your order is going to the US.
As we mentioned in the beginning, it still may get stuck after they arrive.
Your goods may be there, but no one comes to pick it up.
So this time it’s the human aspect.
We are now seeing a shortage of 80,000 truck drivers there, which is unheard of.
To make matters worse, it can double by 2030.
That means it is not really COVID-related.
Just like the factory workers in Vietnam, truck drivers in the States are upset over long hours, low pay, and a lifestyle free of any social life.
In fact, it is not just the US suffering from this issue.
Brexit creates a shortage of pretty much everything, including lorry drivers.
So the Brits also have to manage their expectations on their holiday shopping.
The whole world is sparing no efforts to get over the global supply chain crisis.
But we are way too aware that it won’t be resolved anytime soon, at least not by the end of the holiday season.
Hope for the best, but prepare for the worst.
That’s the mentality we all should have in face of any crisis.
Sources:
- https://www.nytimes.com/2021/11/12/business/vietnam-workers-covid.html
- https://www.washingtonpost.com/business/2021/11/12/job-quit-september-openings/
- https://www.reuters.com/article/china-energy-gas-coal-idAFL4N2S70SS
- https://www.latimes.com/world-nation/story/2021-11-10/china-global-shipping-supply-chain-crisis
- https://www.nytimes.com/2021/11/09/us/politics/trucker-shortage-supply-chain.html
