The commercial pipeline that each year brings $1 trillion worth of toys, clothing, electronics and furniture from Asia to the U.S. is clogged and no one knows how to unclog it.
According to The Washington Post, this month, the median cost of shipping a standard rectangular metal container from China to the U.S. West Coast hit a record $20,586, almost twice what it cost in July, which was twice what it cost in January, according to the Freightos index. Essential freight-handling equipment too often is not where it’s needed, and when it is, there aren’t enough truckers or warehouse workers to operate it. Supply headaches that were viewed as temporary when the coronavirus pandemic began now are expected to last through 2022.
Today’s twisted supply chain is forcing companies to place precautionary orders to avoid running out of goods, which only compounds the pressure.
“It’s going to get worse again before it gets better,” says Brian Bourke, chief growth officer at SEKO Logistics. “Global supply chains are not built for this. Everything is breaking down.”
The pandemic has exposed weaknesses in the nation’s transport plumbing: investment shortfalls at key ports, controversial railroad industry labor cuts, and a chronic failure by key players to collaborate, according to interviews with more than 50 individuals representing every link in the nation’s supply chain.