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"Supply Chain Collapse Will Make Americans
Panic As Extensive Shortages Emerge"
by Epic Economist
"Supply chains remain chaotic, volatile, and unpredictable. The maritime and logistics industry has been in a continuous loop of problems, and now U.S. ports are dealing with a massive flood of empty containers as land capacity issues persist. Companies fear that the renewed congestion will be translated into extensive product shortages on Thanksgiving, Halloween, and Christmas. Meanwhile, consumers are set to face some serious sticker shock given that a new series of disruptions are adding to inflationary pressures all around the globe.
Global supply chains are set for further disruption as hundreds of thousands of workers around the world demand better pay in face of soaring inflation. Many countries are currently seeing slower port operations as labor standoffs continue, including Germany and the U.S. More recently, transport unions in the UK organized a strike that led to the temporary closure of the nation’s biggest port. “Even minor interruptions to port operations can have a major impact on container line network efficiency and cause a domino effect up and down supply chains,” explained Christian Roeloffs, CEO & Co-founder of Container xChange. The strike will also impact U.S. companies and industries that export to the U.K. In August 2021, a total of $66.7 million in US exports were processed in the Port of Felixstowe.
At the same time, in the U.S., land capacity problems are creating port and terminal congestion, a lack of railcars, and the unavailability of truckers and chassis, impacting all trade participants. A massive backlog of empty containers is slowing the processing of new imports arriving at ports every day, spreading fresh fears among exporters and importers over whether the huge volume of cargo will be delivered on time. “Further delays to move cargo could mean shipments don’t arrive by Christmas,” according to cargo brokers and shipping executives.
FMC Chairman Daniel Maffei said that the excessive amount of empty containers and the need for them to be removed are a chief cause of the current congestion woes. “When ocean carriers continue to bring thousands of containers per month to a port and only pick up a fraction of that number, it creates an untenable situation for terminals, importers and exporters, trucking companies, and the port itself,” Maffei said in a statement. Robert Lewis-Manning, the president of the Chamber of Shipping, compared the shipping containers to Lego bricks. "They're piled up and there's just no more place to put them,” he emphasized.
The situation is creating a nightmare scenario for several U.S. industries, but things have been particularly dire in the nation’s auto industry, with parts shortages stalling production amid increased demand. On Friday, Renault’s CEO said that there will be no sudden let-up in the supply chain shortages that have been plaguing the autos industry, which has been facing an “emergency period” due to the ongoing semiconductor shortage.
U.S. consumers are also set to face more challenges. Ultimately the longer wait times, and delays will result in extra costs that will be passed along to consumers, at a time Americans are coping with rising costs for housing, energy, and more. The latest Consumer Pulse Survey found that consumer confidence has plummeted to a new low, with one third of Americans saying that they are feeling pessimistic and that we may be headed toward one of the worst recessions we’ve ever seen. Conditions will continue to deteriorate as we approach the busy holiday season, impacting millions of businesses and consumers in the U.S. and all across the globe. The supply chain chaos has only just begun, and we will be extremely lucky if another collapse doesn’t occur before year’s end."
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