I will share some understanding about this from one of our SCORE content partners, Drake Forester who writes extensively about small business issues and specializes in translating complex legalese into language everyone can understand. His writing has been featured on Fox Small Business, AllBusiness.com, Score.org and many other websites and blogs. One of his works regarding this topic is included in SCORE’s resource library and I will share that as I try to add some clarity to the issue.
What is the supply chain?
The supply chain is the journey products take from where they’re mined, grown or otherwise made all the way to their eventual destinations in the hands of consumers.
Supply chains are made up of so-called “nodes” and “links.” Nodes are stops a material or product makes along the way, like at a factory, port, warehouse, or retail store. A link, on the other hand, is the time a material or product spends in transit between nodes — usually on a cargo ship, train, freight aircraft, or semi-truck.
It’s a complex system, but you don’t need to get into the weeds. Here are the big-picture issues troubling the supply chain.
Two factors influencing supply chain disruptions.
Coronavirus lockdowns spurred major changes in consumer behavior. Money normally spent on experiences was redirected at products. Workers needed home office equipment. At the same time, factories overseas were hit hard by outbreaks and couldn’t keep up with the demand.
So the pandemic started it. But as outbreaks recede in parts of the world, lingering effects continue to ripple down the supply chain. Here’s where we are today.
1. America’s ports are jammed. According to the Organization for Economic Co-operation and Development, about 90% of traded goods travel by sea. Right now, unprecedented “traffic jams” are clogging up America’s ports.
According to NPR, 52 cargo ships were waiting off the coast of Los Angeles one day in late October. Off the Port of Savannah, The New York Times reported that cargo ships were anchored up to 17 miles off the coast, waiting at times more than nine days for their turn to dock and unload their shipping containers.
Additionally, The New York Times noted that nearly 80,000 unloaded shipping containers (50% more than usual) have been left at the port for up to a month, waiting for a ride. You might have heard by now about the country’s shortage of truck drivers. These containers are the rectangular boxes you see stacked up at sea, hurtling by on the interstate behind a semi-truck, or clanking by at a railroad intersection. They can hold almost anything and can be stacked and transferred between vehicles seamlessly.
The problem? Shipping containers are not where they need to be. Some parts of the world have so many empty shipping containers that they’ve run out of places to put them. In Southern California, residents have reported seeing empty shipping containers parked on residential streets. In China, on the other hand, shipping containers are hard to find, causing more delays. Each container stranded on a cargo ship or in a port is a container that can’t be unloaded and then reloaded again.
2. Labor shortages are contributing to the bottlenecks. According to the U.S. Department of Labor, 4.3 million Americans quit their jobs in August 2021. If you’re a small business owner, you’ve likely felt …….