Third, the shipping business over the past decade has not been very profitable - ”a fricking nightmare” my source called it - until now (see below), which meant there was little investment in new ships.
Example: If Pottery Barn needs 50 couches from China, the company orders it, and two weeks later or three weeks later, the couches are on the West Coast of the United States. companies and allows consumers unprecedented immediate gratification from a global cornucopia of goods. That makes for lower inventories, which reduces costs for U.S. Second, companies and consumers increasingly count on just-in-time inventory systems to order goods. 1 exporting nation to the U.S., but Japan, South Korea, and Vietnam are also on the top 10 list. Our imports from Asia across the board are up. Flash forward to today, in August of this year, our imports from China totaled nearly $43 billion. Example: In January 1985 ( as far back as data went), we imported $293 million of goods from China (and had a positive trade balance). "Containergeddon,” is what Steve Ferreira of shipping consultancy Ocean Audit calls it, according to Reuters.įirst, when it comes to the United States, we have been increasing our outsourcing and reliance on imported goods. “I don't think anyone's ever seen anything like this in their careers, anyone who's alive,” says a board member of a large shipping company whose family has been in the business for decades. What we are witnessing is a massive, unprecedented traffic jam of humankind's largest sea vessels that is at the very core of the conundrum. That was true and still is the case in Vietnam, for instance. Initially this was because factories in Asia (for example) had to close for weeks or even months because workers were sick with the coronavirus. No doubt you’ve heard how the world’s supply chain is being stressed like never before, resulting in shortages and delays in everything from semiconductors, to cars, sneakers, exercise equipment, and Rolexes. That brings us - 20 or so months into the COVID-19 pandemic - to a vast oceanic parking lot dotted with scores of giant container ships off the ports of Long Beach and Los Angeles. An under-recognized characteristic of any pandemic is its nonlinear course, which delivers, in true viral fashion, shocking, unanticipated consequences. Despite the nagging disruptions that mark much of what we do - and even worse the horror of continued sickness and death - in some ways, we can hope that the worst is behind us.īut not all of it. We know masks and social distancing are effective. As we head closer to the second anniversary (if that’s the right word for it) of the pandemic, it’s clear we’ve made some great progress fighting COVID-19.
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