COVID's Enduring Impact on Global Supply Chains

At this point in the pandemic, we have been exposed to the effects COVID has had on nearly every industry imaginable. However, media tends to focus more on the immediate effects the virus has had on everyday interactions, rather than impacts that are less visible to the public. The global supply chain blockage is one of those lesser discussed impacts that have yet to be fully realized by the international population. The issue first arose during early 2020 when international demand for almost all goods crashed as global economies went into lockdown. This inhibited significant portions of global trade, manufacturing, and employment went down the drain. However, as 2020 progressed, and lanes of revenue began to reopen, issues within the supply chain became much more visible. 

The entire global trade machine revolves around precise coordination and communication between multiple parties. This was compromised by the addition of various new variables such as varying new economic policies due to the pandemic. This resulted in extreme congestion of certain international trade routes, which in turn backed up local transportation agencies as well. One such international route is the route from mainland China to the West Coast of the United States. Since pre-COVID levels, the price of shipping a standard shipping container from China to the West Coast has increased by a rate of 1300%. However, the price of a flip return to send a container back to China from the West Coast has only increased by a factor of 2. This exemplifies the current discrepencies that shipping industries are facing, as there is a complete lack of organization that leads to illogical differences in prices that can adversely affect certain regions of the world. 

Another issue is the backup of certain industries that can result in a worldwide domino effect. If one product is delayed and it is necessary for the construction of another product, both products experience a delayed rate of production. The second product will then impact a third, and so on and so forth. Because some materials are not being shipped as quickly as pre-pandemic rates, many different industries have begun to slow down their rate of manufacturing as well. This means that even when the world economies are back at full functional capacity, there may still be a period of ramping back up manufacturing in order to catch up. The period of rebuilding is seemingly inevitable as many companies have already made the decision to halt or slow production. 

While the global supply chain is a multi-pronged (and extremely complicated) international issue, the largest single problem with solving the supply chain crisis, is the lack of a central governing body. No single body has the jurisdiction to impose modifications that could quickly remedy the situation. Instead, multiple different parties with different goals must go through extended periods of negotiations, which can easily take multiple months or years. We will have to see how this volatile situation develops as countries discuss further issues of politics, and corporations weigh the economic benefits.

Links:

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https://www.forbes.com/sites/garthfriesen/2021/09/03/no-end-in-sight-for-the-covid-led-global-supply-chain-disruption/?sh=6522695f3491

https://www.washingtonpost.com/business/interactive/2021/supply-chain-issues/?itid=sf_business

https://www.cnn.com/2021/10/03/politics/global-supply-chain-collapse-biden-tariffs/index.html