Cargo Crisis: America's Broken Supply Chain


The channels used to transport imports and exports internationally across the Pacific Ocean have become indefinitely clogged and a major concern for consumers worldwide. The long-term effects of COVID-19 restrictions on the shipping and logistics industry have created a bottleneck which could affect international trade for years, creating shortages and higher prices for imported goods.

Currently, there are a record number of container ships full of cargo backed up on the California coast. The root cause of this problem is that the current supply chain is in absolute shambles, and there is no room to unload cargo. Due to COVID-19 mandates, production was forced to come to a screeching halt in March 2020, igniting a negative domino effect for manufacturers worldwide. 

The first domino to fall within the supply chain was the pace of production. In early 2020, COVID-19 struck China and manufacturers stopped dead in their tracks, as they were forced to shut down completely. New virus protocols were established at importing and exporting ports, causing further delay. Due to the lacking flow of capital from a production freeze, many corporations were forced to lay off employees indefinitely. While the world fell silent and awaited a cure for the virus, many were laid off, forced to stay at home, and rely on government-provided aid. 

The second domino to fall was the labor shortage within the supply chain. When the world began to come out from the shadows and return to normal life, laid-off employees had no interest in returning to work. Many who were laid-off became comfortable with the weekly unemployment aid and increased quality time with their families. There was virtually no incentive to return to their jobs; why give up steady-flowing income without the stress of work? While many businesses were scrambling to gather employees, the demand continued to rise at a staggering rate. 

Third was the rapid surge in demand that the supply chain was unprepared for. While people were stuck in their homes with their stimulus checks, online shopping became a source of distraction. As remote work became the new normal, consumers began to fruitfully spend their checks on office furniture, laptops, home improvement materials, and exercise equipment. The current inventory of many manufacturers quickly became depleted, and replenishing inventory was moving at a snail’s pace. Shipping and receiving ports for cargo ships quickly became congested, and many ships waited along the coast for weeks before they were able to dock. 

While COVID-19 affected all aspects of manufacturing and distribution, the government policies and protocols exacerbated almost every problem. China enacted a policy of testing the entire crew on every container ship and sends the ship back to its previous location if one member tests positive. Container ships are forced to delay docking and unloading, thus causing another traffic jam for production. Unfortunately, it seems as if this cargo crisis won’t be ending anytime soon, as it is projected to carry over into 2022.

With international shipping and supply routes now disrupting the global supply chain, many manufacturers and distributors, who rely on mostly Asian materials, will be forced to adjust their procurement strategies. For the last 30 years, AWC has emphasized US and North American sourcing for wire and cable, limiting its dependence on materials arriving by port. While many in the industry are left waiting for their overseas shipments to be unloaded, Allied's significant investments in and focus on domestic sources have provided the necessary materials required to keep their customers' lines running smoothly.