• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » From Nairobi to Ningbo: The Supply Shocks Spanning Globe

From Nairobi to Ningbo: The Supply Shocks Spanning Globe

Container Ship
A container ship sails at dusk. Photo: Bloomberg
September 29, 2021
Bloomberg

Visit Maryland, the proud crab capital of the U.S., and sandwiches made from the meat of Chesapeake blues cost more than triple the normal price, if they’re available at all.

In Bucharest, Romania, a family waits about six months for a new Hyundai Elantra because of the auto industry’s global microchip shortages.

A parent in Nairobi, Kenya, struggles to find antibiotics for a child’s ear infection after consulting 10 local pharmacists. One of them checked with the central warehouse. None there either.

From high-class problems to difficulties finding life’s necessities, the pandemic has convulsed global supply chains on such a scale that few industries, socio-economic classes or regions are immune. Most experts see at least another six months before any return to normal.

The blame lies in several places, but COVID-19 has essentially robbed the global economy of its rhythm. From deck hands on fishing boats to short-order cooks, cheap labor has become scarce as workers fall ill or stay away from work out of fear for their health — relying on government safety nets in the meantime.

The stockpiling of raw materials has caused shortages and delays that create yet more disruption downstream, forcing factories to slow production of finished goods. When products are ready to ship, it’s a struggle to move them smoothly or cheaply across borders and oceans.

For consumers, the turmoil has revealed the vast distances that goods actually travel to arrive on their doorsteps. For companies that spent decades building worldwide production networks, the debate is intensifying: move manufacturing closer to consumers or watch less-sprawled competitors prosper even more in this environment.

“We’ve actually been a beneficiary through this recent cycle because we are a proximity manufacturer with not a lot of instances of very long supply chains,” said Richard Tobin, president of Dover Corp., a Downers Grove, Illinois-based maker of industrial equipment and components, at an investor conference this month. “What’s happened over the last six months is probably making reshoring a real, real thing.”

But shortening supply chains takes years and massive investments. Minimizing threats like disease outbreaks or natural disasters is the more likely path than eliminating them. “De-risking is the name of the game at the moment, but it’s also not that easy,” said Florian Neuhaus, a partner with McKinsey & Co. in Munich.

So as the supply lines of the global economy fail to keep up with demand, the Big Crunch seen in 2021 might be around as long as the virus throws economies off kilter. Here’s a look at how widely the ripple effects are being felt:

Shop Early, Wear Sneakers

At a Houston Ikea store in early September, some customers arrived before the doors opened at 10 a.m. and hustled to purchase a Sniglar crib, a popular item for expectant families and one that had long been out of stock at that location. A notice had gone out to customers that there were seven available. When the doors opened, one man saw another sprint by in the direction of the baby aisle, prompting a mini footrace. Within minutes, four were snatched up and a line had formed to grab the remaining three.

Expect Creative Solutions

In Sydney, Australia’s most populous city, internet shopping and the delta outbreak have put huge strain on supplies over weeks of lockdown. That means more items than normal are out of stock and wait times for home delivery slots are longer. When their essentials do arrive, some shoppers have been surprised to find their groceries from supermarket giant Woolworths delivered not by the its fleet of trucks, but chauffeured from the store to their door by taxi, a masked cab driver ferrying their bags of milk, bread and other essentials to their front door. 

Be Patient

On Aug. 21, a consumer in Singapore put in a routine Amazon.com order for items that would have to ship from the U.S. Typically these packages take about a week to arrive, and are sometimes consolidated into one package rather than scattered across boxes. While a few items arrived separately with only a slight delay, the order for a three-pack of Carhartt low-cut men’s socks finally arrived a month after the order — four times the normal wait.

Prepare to Pay Up

Linen House, a Cape Town, South Africa-based linen wholesaler, has seen the flow of goods from suppliers in Asia being repeatedly delayed, causing it to miss delivery deadlines and wreaking havoc with its cash flow. Container rates have shot up by as much as fivefold because of the disruptions that the pandemic is causing at ports around the world. Space on containers has been hard to secure and at one point, the company had a shipment of finished goods delayed for six weeks trying to leave India, said Adrienne Sodar, the company’s joint managing director.

Diversify Your Suppliers

In Mexico, the production facility of the Icelandic medical supply company Össur struggled to get access to the ethylene-vinyl acetate needed to make prosthetic feet. Resin for plastic products had been scarce since last year, and they had scrambled to find alternative sources. A year ago, they were dipping into inventory, and had to cut back on their production of neck, knee and elbow braces. But it was the extended lack of ethylene-vinyl acetate that made them unable to meet prosthetic-foot demand this year. By September, according to Eduardo Salcedo, global operations director of Össur de Mexico, they were at 80-85% of their normal production capacity.

Temper Your Expectations

Near Frankfurt, a customer bought a Skoda Octavia family car in June, with a trailer-hitch-mounted bike rack the only missing feature. After promising to install one for 990 euros ($1,160), the dealer later called to say Skoda hitches were sold out but would arrive again in July. A few days later he called to say delivery had been delayed until November. The only option was installing equipment from a third-party supplier, but that product wasn’t compatible with Skoda software that drives safety features like sensors on the bumpers, and the technical tweaks needed aren’t possible for months. So another trailer hitch was installed — but many of the car’s safety features remain disabled, possibly until Christmas.

    RELATED CONTENT

    RELATED VIDEOS

    Last Mile Delivery Logistics Transportation & Distribution Sourcing/Procurement/SRM Inventory Planning/ Optimization Global Supply Chain Management Global Trade & Economics Supply Chain Security & Risk Mgmt E-Commerce/Omni-Channel Food & Beverage Healthcare Retail
    • Related Directories

      Tecsys, Inc.

    Bloomberg

    U.K. Gets Ready for Flu Pandemic With 100 Million Vaccine Shots Deal

    More from this author

    Subscribe to our Daily Newsletter!

    Timely, incisive articles delivered directly to your inbox.

    Popular Stories

    • A TOY TRUCK CARRIES A GIANT BOX WITH A RED RIBBON IN A BOW

      Three Trends to Watch During Peak Season 2023

      Apparel
    • On Demand Webinar_SAP.png

      Optimize your Logistics Pinch Points to Build a Risk Resilient & Sustainable Supply Chain

      Webinars
    • A WOMAN STANDS WITH A TABLET COMPUTER IN A WAREHOUSE, SURROUNDED BY SYMBOLS FOR SHIPPING METHODS

      Five Tactics for Enabling Smart and Sustainable Supply Chains

      Data Management (Big Data/IoT/Blockchain)
    • A MEXICAN FLAG FLIES IN A RISING SUN

      Mexico’s Future as U.S. Go-To Trade Partner Depends on Investment, Infrastructure

      Logistics
    • A close-up of solar panels can be seen in front of a sunset. Photo: iStock.com/JONGHO SHIN

      Is the Biden Administration Undercutting Its Own Policies on Chinese Solar Imports?

      Sourcing/Procurement/SRM

    Digital Edition

    Scb august 2023 lg

    2023 100 Great Supply Chain Partners

    VIEW THE LATEST ISSUE

    Case Studies

    • JLL Finds Perfect Warehouse Location, Leading to $15M Grant for Startup

    • Robots Speed Fulfillment to Help Apparel Company Scale for Growth

    • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

    • Convenience Store Client Maximizes Profit and Improves Customer Service

    • A Digitally Native Footwear Brand Finds Rapid Fulfillment

    Visit Our Sponsors

    Antuit Zebra Anvyl AutoStore
    BEUMER Group Blue Ridge Global Brother
    CHEP Cleo Coenterprise
    Data Capture E2open Enveyo
    Eva Air ForwardX Robotics Frayt
    GAINSystems Generix Geodis
    GEP Global Supply Chain Marketing Summit GreyOrange
    Here Holman Logistics Infor
    Inmar Kinaxis Lexis Nexis
    Locus Robotics Logility LogistiVIEW
    Lucas Systems MCA Connect MPO
    Old Dominion OneRail Overhaul
    PartnerLinQ (Visionet) Port of Virginia Ryder E-commerce by Whiplash
    Saddle Creek Logistics SAP Shyft
    Sourcemap SPS Commerce Tecsys
    TGW Systems Thomson Reuters Veho
    Verusen Walmart Workshop
    • More From SCB
      • Featured Content
      • Video Library
      • Think Tank Blog
      • SupplyChainBrain Podcast
      • Whitepapers
      • On-Demand Webinars
      • Upcoming Webinars
    • Digital Offerings
      • Digital Issue
      • Subscribe
      • Manage Your Subscription
      • Newsletters
    • Resources
      • Events Calendar
      • SCB's Great Supply Chain Partners
      • Supplier Directory
      • Case Study Showcase
      • Supply Chain Innovation Awards
      • 100 Great Partners Form
    • SCB Corporate
      • Advertise on SCB.COM
      • About Us
      • Privacy Policy
      • Contact Us
      • Data Sharing Opt-Out

    All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

    Design, CMS, Hosting & Web Development :: ePublishing