What's going on with global supply chains? (aka "why are we running out of everthing," "why is shipping so slow," "why are things more expensive"). A link roundup thread:

4:20 PM · Sep 16, 2021

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1/ The stories that started appearing over the summer about the state of global supply chains have been ramping up, and I thought it would be worth it to collect some of the articles documenting the disruption/catastrophe/reality of it all.
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2/ There have been some good overview pieces on this, like Alana Semuels "Why Is Everything More Expensive Right Now? Let This Stuffed Giraffe Explain" which follows the journey of Jani, a 4-foot plush giraff, through the pandemic-era supply chain. time.com/6088033/why-inflati…
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4/ But smaller pieces of the story are everywhere. The New York Times framed the situation as "a painful lesson in how interconnected economies are across vast distances," with "delay and shortages in any one place rippling out nearly everywhere." nytimes.com/2021/08/30/busin…
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5/ They peg the problem to the shipping industry: "For the global economy, shipping is at the center of the explanation for what has gone awry." And it IS the case that shipping is the most proximal cause for supply chain snags.
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6/ While "the normal number of container ships at anchor is between zero and one," this week a high of 56 ships were waiting in California. Capacity is at an all time high, a result of demand, administrative backlogs, and labor shortages. news.yahoo.com/record-breaki…
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7/ At the Port of LA average wait time has increased to 8.5 days (was 4.7 in June). Changes in scale over the past decade are compounding the effects. Ships are 2-3x the size of 10 or 15 years ago. They take longer to unload, need more trucks, more trains, and more warehouses.
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8/ Even before the pandemic, labor hadn't scaled the same way.
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9/ For goods coming to the US from China by sea you see an increase in time required from factory to port of 40-50%. The cost for the company shipping that container may be 4-5x as much as it used to be (from a few thousand to $15-16000 a container) freightos.com/whats-going-on…
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11/ While most headlines focused on California, congestion in China is even worse. Stricter COVID protocols for arriving vessels have compounded effects, with delays in bulk carrier processing increasing rates for and adding to general traffic congestion. freightwaves.com/news/china-…
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12/ But while many recent articles focus on shipping, it is important to remember that early in the pandemic we were pretty focused on COVID's impact on production. theverge.com/2020/3/27/21195…
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13/ Not only have these problems not completely disappeared, the current distribution crisis seems to be producing other (differently located) production problems in some industries.
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15/ In many respects, the real problem here is uncertainty. After all, logistical time isn't fast, or slow. It doesn't actually matter how long a container ship takes, or how much product is on hand. What matters is that you can predict it. Logistical time is regular, routinzed.
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16/ Almost every supply chain problem can be traced to a failure in prediction. But usually these are isolated, by geography, by sector, and they have (historically) tended to be relatively short-lived.
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17/ Ten years ago disasters like the Thailand floods decimated hard drive manufacturing. Fukushima led to widespread disruptions, what the New York Times headlined as "A Stress Test for the Global Supply Chain." But effects were felt for months, years. nytimes.com/2011/03/20/busin…
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18/ Global climate change is sure to increase the frequency of these kinds of disruptions.
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21/ Modern supply chains are "lean." Excess is inefficient, and costly. But despite calls to "resiliency," these lean supply chains offer little margin for when things go wrong. As Peter Goodman and Niraj Chokshi put it, "Just In Time is running late." nytimes.com/2021/06/01/busin…
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22/ Another way to put this is that the pandemic has "produced" uncertainty across the planet, in nearly every sector, across all available means of production and distribution. It has called into question labor pricing, worker availability, and resource management models.
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23/ It has also led to rapid changes in consumption patterns. If consumers bought the same "stuff" they were often doing so in different ways, through different distribution channels. And that shift has swung back and forth, as Amanda Mull describes: theatlantic.com/health/archi…
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24/ The other thing that compounds supply chain disruption is that modern productions are incredibly complex interwoven collections of materials and processes, and that these have become distributed into smaller and smaller pieces spread across the globe.
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25/ Minor disruptions to sources for these components can impact a diverse array of (seemingly) unrelated industries, and the dependencies (especially as we get to deeper tiers of the supply chain) can be surprising.
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26/ Even in critical components, stories often highlight the "little-known" countries and companies that play crucial roles in production, like this article on Malaysia and the semi-conductor supply chain wsj.com/articles/covid-19-su…
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(Reader: Malaysia has been an important location in semiconductor production, in various ways, since the late 1970s)
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28/ Or with something (seemingly) simple like bicycle production. Under increased consumer demand, producers struggle to assemble the dozens of parts, sourced from a dozen different companies in various countries, necessary for manufacture. theglobeandmail.com/business…
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29/ So what's being done about it?
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