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September 23, 2021 07:25 pm

Why Deliveries Are So Slow

Americans are habitually unattuned to the massive and profoundly human apparatus that brings us basically everything in our lives. Much of the country's pandemic response has treated us as somehow separate from the rest of the world and the challenges it endures, but unpredictably empty shelves, rising prices, and long waits are just more proof of how foolish that belief has always been. The Atlantic: When I called up Dan Hearsch, a managing director at the consulting firm AlixPartners who specializes in supply-chain management, I described the current state of the industry to him as a little wonky. He laughed. "'A little wonky' is one way to say it," he said. "'Everything's broken' is another way." Hearsch told me about a friend whose company imports consumer goods -- stuff that's normally available in abundance at any Walmart or Target -- from China. Before the pandemic, according to the friend, shipping a container of that merchandise to the U.S. would have cost the company $2,000 to $5,000. Recently, though, the number is more like $30,000, at least for anything shipped on a predictable timeline. You can get it down to $20,000 if you're willing to deal with the possibility of your stuff arriving in a few months, or whenever space on a ship eventually opens up that's not already accounted for by companies willing to pay more. Such severe price hikes aren't supposed to happen. Wealthy Western countries offloaded much of their manufacturing to Asia and Latin America precisely because container shipping has made moving goods between hemispheres so inexpensive. When that math tips into unprofitability, either companies stop shipping goods and wait for better rates, or they start charging you a lot more for the things they ship. Both options constrain supply further and raise prices on what's available. "You look at the price of cars, you look at the price of food -- the price of practically anything is up significantly from one year ago, from two years ago," Hearsch told me. "The differences are really, really quite shocking." The Bureau of Labor Statistics estimates that as of July, consumer prices had grown almost 5 percent since before the pandemic, with some types of goods showing much larger increases. Overseas shipping is currently slow and expensive for lots of very complicated reasons and one big, important, relatively uncomplicated one: The countries trying to meet the huge demands of wealthy markets such as the United States are also trying to prevent mass-casualty events. Infection-prevention measures have recently closed high-volume shipping ports in China, the country that supplies the largest share of goods imported to the United States. In Vietnam and Malaysia, where workers churn out products as varied as a third of all shoes imported to the U.S. and chip components that are crucial to auto manufacturing, controlling the far more transmissible [...] Domestically, things aren't a whole lot better. Offshoring has systematically decimated America's capacity to manufacture most things at home, and even products that are made in the United States likely use at least some raw materials or components that need to be imported or are in short supply for other reasons.

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