If you’ve been shopping in the last month, especially for anything beyond your routine products, you’ve probably noticed that basic goods are hard to find. Even something as simple as a white shirt may have been unavailable to you for the last several weeks. How does this happen? We tend to be so accustomed to the system just working that, when it fails, we don’t know where to start. But the global economy is a bit more complicated than we think, and there are several causes for this bizarre market breakdown.
First, logjams have overtaken major shipping ports all across the country. More container ships are entering these ports than they can handle, and once they’re finally unloaded there is a shortage of truck drivers to remove the product. Ultimately, you have unsightly heaps of product – just sitting there. Rather than reaching customers, product devalues while it waits for its turn. At some ports, roughly 80 container ships are waiting idly for a chance to dock. The average container ship has 14,000 containers worth $100,000 each.
This massive failure in the supply chain is just one element of consumer shortages. Manufacturers are also faced with labor and materials shortages. Demand is also on the rise as a result of the pandemic’s fizzling out, and manufacturers don’t have enough workers or parts to meet it.
Basically, almost anything that could go wrong has. It’s something of a perfect storm; (1) Manufacturers don’t have the resources (labor or capital) to meet demand. (2) What little they can produce gets caught in a global shipping limbo. (3) Once product finally leaves the seaport, fewer truck drivers are available to move product locally.
These shortages could persist through the end of the year. That’s right: even through the holidays. It serves as a harsh reminder of what happens when the massive systems that we take for granted experience even minor turbulence. The good news is that there is no indication that such turbulence is remotely likely to be permanent.
This blog post is part of the CIMA Law Group Blog. If you are in need of legal help, the CIMA Law Group is a law firm in Phoenix, Arizona which possesses expertise in Immigration Law, Criminal Defense, Personal Injury, and Government Relations.
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