Oops, we forgot to fix the supply chain.
Some experts say it never really broke.

At first glance, it might look like the pandemic-era supply chain chaos is nearly over.

Headlines bemoaning shortages of everything from PlayStations and Care Bears to medical devices are no longer a daily occurrence. Just six vessels were waiting to dock at the ports of Los Angeles and Long Beach on Tuesday — a tiny fraction of the 109 that were stuck outside the San Pedro Bay back in January. Meanwhile, the cost of sending a 40-foot shipping container from Asia to the West Coast is now under $3,000, far below last year’s high of more than $20,000.

Still, the structural problems that enabled many of the delays, price hikes, and shortages over the past few years haven’t gone away. Shipping prices have not quite returned to their pre-pandemic levels, truck drivers are still in short supply, and some in the logistics industry are already predicting that there will be problems during the upcoming holiday season. More broadly, the capitalist system responsible for manufacturing and delivering goods throughout the world has not been “fixed.” In fact, it remains as vulnerable to disruption as ever. Consumers are still seeing widespread inflation, not only for energy and food but also for products that often depend on Pacific shipping routes, including apparel and new vehicles, according to the consumer price index summary published by the Bureau of Labor Statistics last week.

“If the supply chain is a patient coming into the ER, then it’s not bleeding to death anymore,” said Daniel Maffei, the chair of the Federal Maritime Commission. “But there are still a lot of issues with the supply chain. Some of them and maybe even the bulk of them predate Covid.”

Other problems, including the energy crisis created amid Russia’s war in Ukraine, mean that even if shipping costs continue to fall, those price declines won’t necessarily be passed on to average people. And plenty of products are still hard to find. Covid-19 shutdowns in China, which manufactures much of the goods sent to the US, has delayed the production of products from clothing to contrast media, a special dye needed for medical imaging. Packaging problems at a pharmaceutical manufacturing plant seem to have contributed to a nationwide shortage of Adderall. Disruptions in the US’s supply of carbon dioxide have made it more difficult to produce certain types of beer, while low water levels have slowed shipping on the Mississippi River and raised the cost of delivering corn and soybeans.

These challenges highlight the complexities and sheer vastness of the supply side of global economics. Although some refer to this system broadly as the supply chain, it’s actually made up of many interconnected and interwoven supply chains. A single company can rely on hundreds of different supply chains that each depend on many different products, components, and companies, sometimes located throughout the world. Every supply chain has its own strengths and vulnerabilities, and resolving bottlenecks in just one isn’t enough to eradicate shortages or bring down overall prices for consumers.

Recode asked eight experts to evaluate the state of the supply chain. Some acknowledged ongoing efforts to make different industries more resilient, but they said many of these projects are years in the making or rely on machinery and products that are affected by the same manufacturing and shipping problems that are impacting consumer goods. Companies aren’t necessarily financially incentivized to change their long-term approach, either. Others defended the supply chain and said that, while there certainly were delays, the system never really “broke” at all.

“Supply chains just adjust, but they were hit with a global pandemic,” said Chris Caplice, the executive director of MIT’s Center for Transportation and Logistics. “You saw all the warts and everything, but it kept working.”

By Rebecca Heilweil Oct 19, 2022, 12:00pm
Source: Vox.com .https://www.vox.com/recode/2022/10/19/23410720/supply-chain-fix-holidays-pandemic. 31 October 2022.

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