In normal times, few consumers consider the impact of supply chains on their everyday existence, but thanks to various factors impacting the travel of materials and goods around the world, the state of the global supply chain has made headlines over and over during the 18 months. Today, it remains difficult to find all manner of items that were once considered commonplace. Most pressingly, a shortage of baby formula is causing parents around the country to panic, but cooking oils, eggs, pet supplies and more have been conspicuously absent from store shelves.
Given some time and proper policy, the supply chain should return to normal in the near future. Still, business leaders and consumers alike need to know what caused these supply chain issues, so they can avoid similar problems going forward.
The Continued COVID Pandemic
Though much of the world has seemingly returned to normal, with minimal physical distancing measures and no mask mandates, the truth is that SARS-CoV-2 continues to spread. Relatively high vaccination rates and less virulent variants have resulted in a much lower death and serious disease rate than in 2020 and early 2021, but the illness has already done plenty of damage to the global supply chain. After weeks and months of government-mandated shutdowns, manufacturing facilities are only just beginning to operate as normal. Continued spikes in COVID spread and the looming threat of more dangerous variants will likely keep manufacturing output somewhat subdued for the coming months or years.
The Blockage of the Suez Canal
One full year after the beginning of the COVID pandemic, one of the largest container ships in the world ran aground in the Suez Canal, fully blocking the canal and preventing other ships from passing through. The captain of the Ever Given lost the ability to navigate during a dust storm when high winds pushed the ship diagonally and wedged the hull onto the sandy bank. Unlike other ships in the Suez Canal, the Ever Given was not connected to a tugboat, and because hundreds of ships were before and behind the Ever Given, it took more than six days to clear space for rescue vessels to enter and liberate the massive ship from the shore. Because the Suez Canal is such a vital channel for trade, supply chains were severely disrupted not just during those six days but for weeks and months afterwards, teaching businesses and governments an important lesson about modern trade routes.
Severe Weather Events Around the World
The climate crisis is real, and it is worsening every moment. Changing air and water temperatures cause changes to essential global systems like oceanic currents and air streams, which determine weather and climate in every area of the world. In some cases, this results in more numerous or more intense weather events, like severe tropical storms and hurricanes, severe wildfires, severe ice storms and severe mudslides and floods. Supply chains have always been disrupted by weather events, but when weather events happen more frequently, supply chains suffer more frequent disruptions. Though companies can engage in smarter supply chain design to avoid regions more often plagued by severe weather, the truth is that climate change will affect every region eventually unless we take drastic measures to stop it now.
Massie Pent-up Demand for Goods
The COVID pandemic sent shockwaves of uncertainty through consumers, who were all but locked in their homes, unable to visit friends and family or support the local businesses they love and cherish. The widespread fear — coupled with the elimination of income potential for large portions of the population — dampened demand for more than a year. In 2021, as the world slowly but surely returned to normal, demand rebounded, and consumers suddenly were voracious for all manner of goods. Unfortunately, businesses were unprepared for the sudden and massive spike in demand, which left many scrambling to find supply. Thanks to other challenges — the pandemic, weather events, trade blockages — supply chains have been unable to respond as quickly as consumers have expected, resulting in disruptions and delays.
Every business maintains a different supply chain, so every business has suffered from slightly different supply chain challenges over the past few years. Hopefully, business leaders will learn important lessons from the disruptions they have recently faced, and supply chains will be stronger into the future.