The Accidentally-on-Purpose Broken Supply Chain

Sec. of Transportation Pete Buttigieg*

This morning a couple of news stories pulled together for me what might underlie our growing supply shortages. One story described the chaos in a California port city, where shipping containers, now being unloaded from ships on a 24-hour schedule thanks to the resourceful Biden Administration's plan. They were then being parked on residential streets after being emptied since the trucking company had no more room on its lot for the empty containers.

The article from Breitbart quoted Pete Buttigieg, who's just getting back to work after a long paternity leave. Two things our Secretary of Transportation said raised crimson flags for me, as he tried to explain why things were such a gosh-darn tangle right now:

"There are so many pieces to the supply chain, and most of them are in private hands." Pause. The only word missing from that sentence is unfortunately, but it is implied. Would shipping and delivery work a lot better if the government ran it? Maybe Pete and his colleagues are angling to solve our supply chain woes by the sure remedy of sovietizing the complex business of getting product to market. 

He continued: "The Administration can act as an honest broker, and that's what we're doing . . . . There are $17 billion in port improvements in the President's infrastructure bill, and they're urgently needed."

Bingo. So pass that (grotesquely inflated) infrastructure bill if you want to see this supply situation get any better! is what he's saying. I see Pete has this nailed down.

Then I looked at a Fox News story that gave us man-on-the-street reactions, from a Costco parking lot, to half-empty grocery shelves and distinctly higher prices that these shoppers were seeing. One was a man who ran a grocery store himself. Unable to get product delivered to his store (he felt the supplies are going primarily to the very large retailers), he was buying cartfuls of groceries in an effort to stock his own store's shelves, while having to raise his prices 10 to 20 percent.

If the small merchant was not run out of business by a prolonged Covid lockdown, he now struggles with an embarrassingly small inventory and sharply higher prices for his customers; not to mention being understaffed due to the mad labor shortage. This is not a prescription for success in the retail world.

So if any of us suspected that the lockdowns unfairly targeted small businesses (I do), the current supply chain fiasco is dealing them another mighty blow. Debacles at this level are almost never accidental--to wit, the Afghanistan withdrawal. 

Of course, none of these things are really a problem if we just, as the Administration advises us, lower our expectations. But how low do we have to go, Joe? I'm sure he is going to show us.

Update 10-21-2021: We must spread the credit where due for today's shipping troubles. The World Bank and IHS Markit, in their ranking for efficiency of more than 300 ports around the globe, put the L.A. and Long Beach ports near the bottom. Also, California's Assembly Bill 5 (AB 5) has been credited with throwing that state's trucking operations into tumult since 2020. Port operations, of course, rely heavily on the truckers who take the products away, making room for more unloading.   

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*Photo credit: Reuters/Carlo Allegri