We know inflation is on the rise and COVID hit many supply chains hard. The last year or so, however, that has seemed to smooth out a bit. People have received their online orders; shipping and trucking has hummed along getting food to our grocery stores and supplies to our industries.
Behind the scenes, however, it’s a much different story. Things are not fine and logistics experts are warning that we’re headed for a full supply chain collapse in the near future.
The consequences of this could be disastrous and interrupt many daily necessities we take for granted.
Industry Insiders Warn COVID Cutbacks Will Lead to Collapse
The truth is that not everything is back to normal. COVID regulations, quarantines, and border issues are still making international trade and commerce much harder. A letter to the UN from the International Chamber of Shipping is sounding the alarm on this.
They’re saying full freedom to ship must be brought back before supply chains “buckle.” The letter isn’t from just some random group. The International Chamber of Shipping is an industry leading organization that makes sure products and resources get where they need to be on time.
They also act as a voice for the whole logistics field. The letter was signed by the main organizations involved in the global supply chain and travel, including the International Air Transport Association (IATA) and the International Transport Workers’ Federation (ITF).
As the letter notes, it’s not just COVID restrictions causing extreme worry here; it’s the lack of workers. As service and frontline workers are treated like garbage and forced to work (while others sit at home collecting government paychecks), more and more companies can’t find drivers or captains to move goods.
The letter urges the International Labor Organization (ILO) and the UN to move forward with “swift” and real action right now to prevent a supply chain collapse.
Lockdowns everywhere are causing worldwide supply chain ‘system collapse’. Collateral damage of destructive and unscientific govt interventions.
— Luke Johnson (@LukeJohnsonRCP) September 30, 2021
Case Study: Costco
One case study of how supply chain issues are affecting a company is Costco. The American multinational giant first opened in Seattle in 1983 and is famous for its large bulk sales and low prices.
Costco’s had a nightmare trying to navigate COVID delays and restrictions; they now just privately hired their own shipping boats to get around third party delays.
Costco Chief Financial Officer (CFO) Richard Galanti said they’ve had to face huge problems including containers arriving without enough goods and customs delays from COVID.
They’ve also been forced to deal with not being able to get enough materials and products in time from certain markets, due to COVID issues and not having enough workers in the supply chain.
Another factor for Costco and other retail giants is that many Americans are stockpiling essentials, leading to goods shortages. The high demand is good, according to Federal Reserve Chairman Jerome Powell, who urged people not to worry too much about rising prices.
That’s easy for him to say, but the problem is also the demand combined with the numerous weak points in the supply chain could rapidly become a full collapse.
Still you don't see the game?
Lockdowns brought about an unstoppable domino effect of supply chain collapse in various countries….
Crops are rotting in the field, drivers not available to bring supplies, buying power of middle class collapses, panic begins to set in…. pic.twitter.com/uSMlmlrBmy
— Zaid Hamid (@ZaidZamanHamid) September 25, 2021