A paint manufacturer that needs 27 chemicals to make its products may be able to buy all but one, but that one - perhaps stuck on a container ship off Southern California - may be enough to halt production. Just about anything that is produced or manufactured - from chemicals to electronics to running shoes. The result was the mother of all traffic jams. With warehouses full, containers - suddenly serving as storage areas - piled up at ports. Many companies responded to initial shortages by ordering extra items, adding to the strains on the ports and filling up warehouses. This situation was worsened by the shutdown of the Suez Canal after a giant container ship got stuck there, and then by the closings of major ports in China in response to new Covid-19 cases.
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At the same time, truck drivers and dockworkers were stuck in quarantine, reducing the availability of people to unload goods and further slowing the process. At ports like Los Angeles and Oakland, Calif., dozens of ships were forced to anchor out in the ocean for days before they could load and unload. Meanwhile, at ports in North America and Europe, where containers were arriving, the heavy influx of ships overwhelmed the availability of docks. Even huge companies like Target and Home Depot had to wait for weeks and even months to get their finished factory wares onto ships. And many containers were getting bumped off ships and forced to wait, adding to delays throughout the supply chain. By early 2021, the same journey was fetching as much as $25,000. Before the pandemic, sending a container from Shanghai to Los Angeles cost perhaps $2,000. In those places, empty containers piled up just as Chinese factories were producing a mighty surge of other goods destined for wealthy markets in North America and Europe.īecause containers were scarce and demand for shipping intense, the cost of moving cargo skyrocketed. In the first phase of the pandemic, as China shipped huge volumes of protective gear like masks and hospital gowns all over the world, containers were unloaded in places that generally do not send much product back to China - regions like West Africa and South Asia. In simplest terms, they got stuck in the wrong places. What happened to all the giant container ships? At the same time, finished products - many of them made in China - piled up in warehouses and at ports throughout Asia because of a profound shortage of shipping containers, the standard-size steel boxes that carry goods on enormous vessels. The steep surge in demand clogged the system for transporting goods to the factories that needed them. Factories whose production tends to be fairly predictable ramped up to satisfy a surge of orders. The timing and quantity of consumer purchases swamped the system. They added mixers and blenders to their kitchens, as parents became short-order cooks for cooped-up children. They bought paint and lumber for projects that added space or made their existing confines more comfortable. They put office chairs and new printers in their bedrooms, while adding gym equipment and video game consoles to their basements. Demand for some things - restaurant meals, trips to vacation destinations, spa services - indeed cratered.īut Americans took the money they used to spend on such experiences and redirected it to goods for their homes, which were suddenly doubling as offices and classrooms. Trade Talks: After several weeks of rising tensions with China, the Biden administration announced that it would begin formal trade negotiations with Taiwan this fall.CHIPS and Science Act : President Biden signed into law a $280 billion bill aimed at building up America’s manufacturing and technological edge to counter China.But critics argued the tensions over Taiwan showed that Washington needed stronger military and economic strategies. Reassuring Allies: Amid China’s military exercises near Taiwan, the Biden administration said its commitment to the region has only deepened.Pelosi’s Taiwan Visit : House Speaker Nancy Pelosi’s trip to Taiwan exacerbated tensions between the United States and China, which claims the self-governing island as its own.Read More on the Relations Between Asia and the U.S.
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