A recent article from Columbian reporter Will Campbell details how global supply issues are impacting local companies. Officials from a development company, car dealer, toy maker and pizza outlet explain how a slowdown in the supply chain is crimping product availability and leading to an inflationary spiral.
“From lumber to windows to appliances, the entire supply chain that supports the building industry has been disrupted,” said Andrea Smith, spokesperson for the Building Industry Association of Clark County. “Costs for building materials have soared since the onset of the COVID-19 pandemic, but nothing has been done to correct these issues.”
To some extent, little can be done. COVID has intermittently led to the closures of manufacturing plants across the globe, and soaring demand for consumer products has led to shipping bottlenecks — particularly from Asia. West Coast ports, the typical receptacles for products from Asia, have been backed up for months with ships waiting to offload their bounty.
In one example, a major container shipping terminal at China’s Ningbo-Zhoushan Port has been closed because of a single coronavirus case. The Wall Street Journal reports: “The cascading effect will lead to crowding at ports along the Asia-to-Europe and trans-Pacific routes that could further slow the flow of goods. It will also hit cargo owners from giant retailers like Walmart Inc. and Amazon.com Inc. to mom-and-pop shops, which will have to deal with late deliveries and higher transport costs as they work to restock ahead of the holidays.”
A full economic recovery from the pandemic will require the reopening of supply chains that allow manufacturers to receive items in a reasonable time frame at a reasonable price. But other factors could cause lasting issues with the supply chain that hamper businesses and, ultimately, consumers.
As CNBC reported last week: “The onset of the coronavirus pandemic caused unprecedented, worldwide supply-chain disruptions, but experts say that’s a drop in the bucket compared with the disruptions that climate change will cause.”
For example, about one-fourth of the lumber consumed in the United States comes from Canada, but wildfires and drought in that nation are stifling lumber production and transport. The same issues are being seen in the Western United States.
Extreme weather events also are causing workplace disruptions. According to the United Nations Development Program, climate change could lead to more than $2 trillion in productivity losses by 2030.
Climate change naysayers like to claim that addressing that pressing issue will slow the American economy. In the process, they typically ignore the inevitable economic impact of severe weather and the cost of not effectively addressing climate change. “These are enormous stress to many supply chains of companies, and not just companies that are making physical products but in finance and services,” John Sterman, a professor of management at MIT, told CNBC.
Unclogging global supply chains is essential to invigorating the economy. The Biden administration in June appointed a task force to conduct a 100-day survey of supply chain issues, and Vice President Kamala Harris is currently in Southeast Asia to discuss the issue with allies.
Ideally, progress will be made that benefits not only multinational corporations but local retailers, as well. But protecting supply chains also will require long-range attention to climate change.
