Some time ago, an article appeared in Automation Trader in which we warned against the impending disaster. Supply chains are stretched to the limit and global infrastructure is simply not ready for the burdens that have fallen on it.
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If in the early spring of 2020 someone raised the thesis that a global pandemic could hit supplies so badly, they would be labeled a pessimist at worst. However, as it turned out, the worst-case scenario is currently showing in front of our eyes, and the forecasts in the context of the upcoming holidays are not very optimistic.
A serious problem
Industry media across the Atlantic has been sounding the alarm for a long time and signaling that the problem is too serious to be ignored. The "FrightWaves" website devoted a lot of space to the situation in Los Angeles / Long Beach, which is the world's largest unloading port, which, due to its size, has a very strong impact on the situation not only on the other side of the great water, but actually on the entire planet. It is, of course, about the port's capabilities, which, despite its large size and very good infrastructure, is not able to handle all the container ships going there.
Effect? Giant queues of ships with goods that reach far into the ocean just to wait for their chance to unload. The most pessimistic scenario currently assumes staying at anchor for up to several months, which naturally results in interruptions in the supply of all possible goods, which, along with billions of dollars, are trapped beneath the seams.
However, it cannot be otherwise, since the port has to cope with traffic volume on an unprecedented scale. Within a month, it has to handle a traffic several times greater, and the mentioned source states that another increase in processing capacity is simply not possible.
The president is entering the game
- The goods that reach us and the related delays are one of the main challenges they face. This is, unfortunately, a bottleneck in the supply chain, said Jen Pisaki, the press secretary of the White House. The situation is so serious and so bad that President Joe Biden himself had to join the action. This fact alone shows quite clearly that the jokes are over. - This bottleneck applies to all industries and we see the problems they are struggling with practically every day. This, in turn, leads to a situation where goods in front of the worlds are ordered much longer in advance and the problem only grows - he added.
Exactly ... Christmas. Their immediate perspective is a huge problem for many industries in the case of problems with ports. The most obvious ones, such as electronics, food or clothing, are of course only one side of the coin. Secondly, there is also the industrial sector, which has been constantly complaining about deficiencies in access to the necessary components for several months. Unfortunately, the queues in the oceans, and thus the smaller number of free container ships, make it difficult to be an optimist in such a situation.
Record prices
In such a situation, it is also difficult to count on the fact that additional working hours of ports or the opening of new unloading terminals could heal the situation. - I don't think it could be of use," said Ed DeNike, president of SSA Containers. - We have already opened our gates wider, but it does not matter, since we do not have adequate support from truck drivers. There is simply nowhere to take this cargo, he added.
The whole situation has already translated into freight prices, which are now record-breaking and even reach 35,000 dollars! It will also leave its mark on prices in general - virtually all possible commodities.
It must be remembered that the industrial automation industry is not a lonely island in all this confusion and it also struggles with problems. Extended delivery times and a higher price are unfortunately something that we will struggle with for some time to come, and "canceled" Christmas may be the least of the problems in this context.
