Why COVID Shipping Bottlenecks Could Take Years to Untangle

Why COVID Shipping Bottlenecks Could Take Years to Untangle

WASHINGTON — The world’s product supply chain is facing serious challenges as demand for products increase while the cogs of the system are stuck in severe COVID-created bottlenecks that might take years to untangle.

Here are the details: Forbes magazine reports that there seems to be no end in sight to the global supply chain crisis that has led to an increase in prices and a shortage of products and components.

In February 2020, demand for most goods fell sharply as the world’s economies went into lockdown.

Cargo ships stopped sailing, manufacturing capacity was cut, and workers everywhere were displaced.

But only a few months later, imports to the U.S. surged and the global economy was turned back on.

This sudden restart created massive bottlenecks.

A shortage of shipping containers emerged, and shipping rates for certain routes skyrocketed.

International ports became congested and this congestion spread to railroads and inland rail terminals.

This situation was made worse by a critical shortage of truck drivers and the wheeled chassis needed to move containers between trains, ships and storage areas.

With demand looking strong through the holiday shopping season, and with COVID outbreaks and bad weather periodically shutting shipping hubs, it looks like product shortages and price increases will be the norm for quite a while.

The big problem seems to be that the complex system that moves raw materials and finished products around the globe requires predictability and precision.

And with the COVID scare, both predictability and precision had been lost.