Disruptions at various points of the supply chain can, therefore, have a significant, if not debilitating, impact that, if the interruptions are prolonged, would have serious commercial implications that would likely prompt each actor (whether a business such as a shipping line or an individual such as a longshoreman) along the line to assess their economic and strategic positions. Factory workers may refuse to return to work, the sailor may stay the course despite the hardships and stress from social-distancing rules and quarantine, or a shipper may do little, praying quietly that the huge profits it is raking in will last as long as possible.
The pandemic and the supply-chain crisis
The supply-chain crisis started soon after the Covid-19 outbreak in 2020 but was not easily discerned by the public. This was because it took time for consumers to feel the pinch, and the media were slow to pick up on the broader issue, as reporters focused on specific products needed during the pandemic including face masks and other personal protective equipment (PPEs), medical supplies such as ventilators and oxygen, and then vaccines once they became available.
This underscores two points about supply chains: First, the motivation for them and how they are laid out are straightforward: costs and efficiency. The lowering of tariffs over the years of regionalization and multilateral trade liberalization and the lowering of transport costs meant that a complex supply chain – more than likely with China in the loop somewhere, typically for final assembly – makes commercial sense. It may even be the only way for a company to make a profit, given the labor costs and skills in its main markets.
Second, some goods are more necessary or more sought after than others – depending on context and changing circumstances. One does not think about how important it is to have a mask unless there is a coronavirus on the loose. But this also applies to simple sundries such as toilet paper and to strategically important items such as semiconductors and rare earths and mineral, energy and food. The goals of energy and food security are about ensuring there are safe, secure – and (applying the goal of sustainability) environmentally sound – supply chains for these essentials at any time.
Another important aspect of the supply-chain problem is that this is not just a developed-world issue, though the global media only started reporting on it more closely because it began affecting retailers and consumers in the West, who noticed delivery delays and shortages of items from plastic utensils to men’s suits, as well as goods such as toys that are traditionally in greater demand as Christmas approaches. It was roughly only in the late summer of 2021 that more thorough and thoughtful reports of the extent and causes of the disruptions in supply emerged.