Despite what conservatives say, Joe Biden is not trying to ruin the holiday shopping season.
President Biden announced this week that the Port of Los Angeles would operate 24/7 in a bid to address product shortages in the United States. The news arrived in tandem with the Labor Department’s release of data showing that the ongoing supply chain crisis is driving up consumer prices and inflation.
As handy as it would be to blame just one person for America’s supply chain woes, the situation and its solutions are far too complex for such an easy explanation. Let’s discuss.
So the supply chain is complex. What does that even mean?
The supply chain is how the global economy produces and delivers the stuff that people buy. It encompasses all the people, companies, and countries that play a role in that process. Technicians at facilities in Taiwan who make computer chips are part of the supply chain, and so are the truck drivers that deliver goods from warehouses to retailers in the US.
Factories that make the plastic used in packaging, cargo ships that move products from Asia to the West Coast, even Amazon’s fleet of jets are all considered part of this incredibly complicated system of global manufacturing that’s been dramatically disrupted in the past couple of years.
How did the supply chain get so messed up?
It’s tempting to blame the pandemic alone for the current supply chain catastrophe, but in some ways, the pandemic merely exacerbated existing problems with global trade and exposed some new ones.
What the pandemic did do was cause factories to shut down, usually because there weren’t enough workers, and that created shortages of products and components. Those shortages led to bottlenecks and delays in product manufacturing (if factories don’t have the parts to build something, it doesn’t get made and doesn’t get shipped).
Ikea can’t ship furniture parts from its warehouses to its stores thanks to the trucker shortage. A supply crunch for petrochemicals has driven up the cost of making anything that includes plastic, including children’s toys.
Who broke the supply chain?
Again, no one person is responsible for upending the global supply chain. Covid-19 has also affected consumer demand — namely, which products they want to buy and how much — creating constant changes that the supply chain just hasn’t been able to keep up with, especially lately.
It seems like we’ve had plenty of time to fix these problems. Why are they suddenly ruining Christmas?
Global manufacturing has been operating at full capacity for more than a year. But without any slack to address worker shortages, bottlenecks, and delays, problems have only piled up. ’ Ellen Hughes-Cromwick, a senior resident fellow for climate and energy at the think tank Third Way, said. “So we just went out and bought like crazy.”
This record number of imports is slowing down product deliveries. We can agree that it’s everybody’s problem. But what’s Biden actually doing to fix it?
“The government has a role with regulations and enforcing laws, creating laws, and trying to stimulate development. But other than that, they’re powerless as far as how commerce works.”
If Biden can’t fix it, who can?
No one can fix the supply chain challenges before the holidays because they’re too complicated. In the long run, it’s possible that the US government can change policies that contributed to this situation in the first place. Politicians could shift their approach to trade, which has historically encouraged US companies to manufacture products abroad. Admitting more people into the US could address a shortage of delivery and port workers.
But these ideas are a reminder that US supply chain policy does not exist in a vacuum. It’s an amalgam of all sorts of broader policy choices that aren’t so easy to change.
When is this all going to end?
Some experts say it will be months before these supply chain problems resolve themselves. Others think these disruptions represent a new normal that could last years. Regardless, there’s no reason to think these issues will be fixed by the holiday season. In fact, the White House has already said there’s no guarantee that packages will arrive on time.