The Disruption Report #34: Americans Don’t Understand the Supply Chain, an Attempt to Warm Chinese and American Business Relationships, and Chinese Port Backups

Group of multiethnic anxious people men and women biting fingernails feeling nervous stressed

Americans and the Supply Chain; a profound disconnect

“Americans are habitually unattuned to the massive and profoundly human apparatus that brings us basically everything in our lives.”

Americans Have No Idea What the Supply Chain Really Is, Amanda Mull, The Atlantic

There is an excellent article in the current Atlantic, and I think an important one, about the supply chain and how little Americans understand about how it works and if it exists at all. Americans Have No Idea What the Supply Chain Really Is” by Amanda Mull does one of the best jobs I have seen of encapsulating what is currently happening to the world’s flow of goods.

Everyday life in the United States is acutely dependent on the perpetual motion of the supply chain, in which food and medicine and furniture and clothing all compete for many of the same logistical resources. As everyone has been forced to learn in the past year and a half, when the works get gummed up—when a finite supply of packaging can’t keep up with demand, when there aren’t enough longshoremen or truck drivers or postal workers, when a container ship gets wedged sideways in one of the world’s busiest shipping lanes.

Americans rightfully never think about how all of those products got on the shelf because they have never had to think about it. The last time the country suffered shortages and rationing was World War II and that was 76 years ago.

What is ironic, says Mull, is that the shortages are not a warehouse or container ship problem so much as a human one. As she puts it:

The supply chain is really just people, running sewing machines or loading pallets or picking tomatoes or driving trucks. Sometimes, it’s people in the workforce bubbles of foreign factories, eating and sleeping where they work, so companies can keep manufacturing sneakers through a Delta outbreak. The pandemic has tied the supply chain in knots because it represents an existential threat to the lives of the humans who toil in it. The fact that Americans now can safely go on vacation does not mean that people half a world away can safely make new bathing suits for them.

An attempt to Warm Up the U.S. / China Business Relationship

Commerce Secretary Gina Raimondo is going to China. That’s according to The Wall Street Journal article by Bob Davis, “Commerce Secretary Gina Raimondo Aims to Strengthen Business Ties With China,” who quotes her as stating:

“…She plans to lead delegations of U.S. chief executives overseas, including to China, to hunt for business and discuss longstanding trade issues, though nothing has yet been put on the calendar.”

“Chinese economic policies disadvantage U.S. companies by subsidizing exports at below-market prices and winking at the theft of intellectual property, Ms. Raimondo said. Even so, she said the U.S. must trade with China given the size of its market.”

It all sounds good, but I don’t like the fact that “nothing has yet been put on the calendar. This is a case where we need to see action by China and the U.S. to improve the international business environment so that goods flow, people are healthy and men and women have jobs.

Backup At Chinese Ports Worse Than in the U.S.

In Disruption Report #31 I wrote about the record-breaking number of ships waiting to unload off the Ports of Los Angeles and Long Beach. It turns out that it is worse in China, much worse. Here is how a Freightwaves article by Greg Miller, “Container ships now piling up at anchorages off China’s ports,” puts it:

There are over 60 container ships full of import cargo stuck offshore of Los Angeles and Long Beach, but there are more than double that — 154 as of Friday — waiting to load export cargo off Shanghai and Ningbo in China, according to eeSea, a company that analyzes carrier schedules.

These historic backups mean more delays and headaches for those who are desperately trying to get their goods on retail shelves and into e-commerce warehouses.

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