The Patriot Post® · Our Supply Chain Woes Continue

Supply chain problems that have plagued manufacturers, shippers, and consumers since the outbreak of the China Virus in 2020 are predicted to worsen in the coming months, analysts warn. What a shocker.

A recent tally by the Royal Bank of Canada found that fully one-fifth of the world’s container ships are currently stuck in congested ports around the globe. The Port of Shanghai leads the way: A whopping 344 ships are anchored there with no place to go, a 34% increase over the past month.

It’s no coincidence that Shanghai is currently the capital of shipping congestion. The Chinese government’s wrongheaded and totalitarian COVID lockdown of that country’s largest and wealthiest city has predictably failed to contain the virus. It has also tossed the region’s manufacturing and shipping industries into a tailspin with unavoidable ripple effects being felt around the globe.

Let’s look at how the dominoes are tumbling. Because so many ships and containers are tied up in ports, shippers are having a tough time scheduling new runs. Bookings get canceled, runs get rescheduled on the fly, and ships leave port at less than full capacity. This leads to more ships being utilized to move the same amount of cargo, along with more manpower and more fuel. This, of course, raises shipping costs and consumer prices.

Shipping goods from China to the U.S. can now take up to 74 days longer. And with Joe Biden’s ineptitude rendering him unable to address the supply chain issue, major import stations such as Long Beach, California, continue to suffer extended turnaround times and epic congestion. Inbound shippers are now bouncing from West Coast ports to the Gulf of Mexico and the East Coast, desperately hoping to find an open slot to unload.

Tech companies and consumer goods manufacturers that all thought investing heavily in China was a good idea years ago are now reaping the whirlwind while they suffer from the Shanghai squeeze. A shortage of microchips and the materials used to make them has led Apple to forecast a $4-8 billion sales shortfall this year. Nokia and Nintendo are suffering similar issues, and Daimler and Volvo are among the many auto manufacturers that are feeling the ripple effect of chip shortages as they struggle to find the parts for engine sensors and vital electronic components of even the most basic automobiles.

All this virtually guarantees ongoing shortages of consumer goods, coupled with high prices and crippling inflation, which has hit 40-year highs for five straight months. Economic analysts predict a long painful summer, and that’s not even considering the ancillary effects of Russia’s war in Ukraine.

The saddest part of this story, though, is that much of this pain could’ve been prevented. The first rule of good finance is diversification. America didn’t need to put all its economic eggs in the China basket, but companies and politicians tend to think only about the next fiscal quarter and the next election. China has circled the globe to gobble up the precious metals used in electronics manufacturing, and those who sounded the alarm were silenced by the woke crowd. The same politicians who praised China stood by while bottom-line-oriented American companies offshored much of our most important consumer, medical, and technological manufacturing to China. Never once, it seems, did they ponder the national security consequences.

Joe Biden’s answer to all this is to blame Vladimir Putin, even though everything noted above was in motion long before he invaded Ukraine. Biden helped get us into this mess, and he’ll be of no help getting us out of it. Elections, it seems, have consequences.