This is Not Just COVID - Supply Chain Disruption Has Been Building for Years

 I will not bore you with all the pictures and the discussion of how many ships are off the coast of LA waiting to get unloaded.  If you are reading this, you already know that fact.  What I do want to discuss is the real problem with supply chains and the root cause of this mess. 

My fear is everyone is attributing everything to covid-19 and covid-19 certainly did not help.  Covid-19 dramatically changed the buying patterns across the world (from experiences to things) and that impacted supply chains tremendously.  However, like a lot of things related to covid-19, the impact merely accelerated a trend which was already growing.  My thesis is this:  The infrastructure of global supply chains was cracking and breaking and Covid-19 sped it up.  What is included in infrastructure:

1. Driver capacity
2. Lack of investment in highway infrastructure (just look at the trucks parked all over every night)
3. Lack of investment in port infrastructure
4. Lack of connectivity in systems (i.e., you book a container to come to the US but the people on the ground don't know when or even if it is coming)
5. Lack of a cohesive strategy on chassis management
6. Massive disruption and economic distortion with "on again and off again" tariffs. 
7. Lack of investment in real assets.  A lot of money going into apps and other systems for visibility etc. but what we need our trucks, drivers, trailers, containers and ships. 

My belief is until we get a comprehensive national strategy to deal with these issues, much like we have a national security strategy, petroleum reserve strategy etc. we will have these problems forever and what you see now may actually be the "new normal".  If you look at the group that is meeting now with the White House they still signal their belief that this is just a temporary covid-19 problem.  Their newest idea?  Keep the ports open longer!  Will that help? Yes, but does that deal with the core problems?  Absolutely not.  It is the aspirin for a headache which is actually caused by high blood pressure.  Your head will feel better but eventually your heart will burst.  

As much as we may dislike it or may hold an "all things government does is bad" idea we have to develop a national strategy to address these issues.  Remember, the Interstate Highway Network was a project the federal government did, with private industry, to ensure we could defend the country and it had the effect of enabling smooth frictionless commerce.  We need a big idea like that now.  

Don't let the excuse of covid-19 cover up all the issues in the supply chain in the United States. Despite all the billions of dollars invested in technology over the last 5 years, the global and national supply chains are performing worse than ever. 

And, for those of you who just cannot get enough of it, I will provide the obligatory picture of ships backed up at port.