The New York Times ran a story recently about how supply chains between Asia and North America were disrupted by a COVID-related shipping container shortage. Early in the pandemic, freighters from China delivered hundreds of thousands of face masks to Africa before abruptly changing routes to meet unexpected demand in North America. This resulted in a shortage of shipping containers in Asia and North America—and a glut in Africa. Consequently, freighters are now languishing in the Pacific Ocean, unable to unload the appliances and other goods from their cargo holds.
I took great interest in the article because my wife Catherine and I are renovating our kitchen and recently were thrown a curveball. Catherine did the design and she’s functioning as general contractor, working with a cabinet maker, an electrician, a plumber, a granite guy, and three burly builders. The renovation is a labor of love and an investment in our new townhouse.
A few weeks ago, Catherine and I went to our local big box home improvement store to buy a range and a refrigerator to go with the dishwasher she had ordered, and which was to be delivered the following day. We walked into the store with around $3,500 burning a hole in our pockets. Like most consumers these days, we had done our research online and we knew exactly what we wanted. “We want that range and that refrigerator,” we told the salesman, Otto. Otto excused himself, checked on a computer terminal, returned to where we were waiting, and informed us that neither of the appliances were in stock.
“That’s ok,” Catherine said. “We won’t need them for a bit, so we’d like to order them now.”
Otto looked glum. “They won’t let us take your money.”
“You’re kidding, right?” I asked.
He shook his head somberly.
“How long until the items are in stock?” Catherine asked.
Otto shrugged. “I’ve got people waiting for appliances they ordered last summer.”
Well okay then. We returned to the display area and picked out another fridge and another range. Alas, neither was in stock. We asked about a third pair. Again, not in stock. At one point Otto looked at us sheepishly and said, “Good thing I don’t work on commission, huh?”
“Let me ask you a question,” I said. “We have one more item on our shopping list for today: a bag of rock salt. Do you know if that’s in stock?”
“Should be,” he said, happy to salvage a small win.
We drove home in a state of mild shock. We had been literally unable to persuade a retailer to take our money. The good news was that rock salt was available. The bad news was that when we got home, Catherine learned that the dishwasher she had ordered wasn’t either.
Eventually we did find a range in stock, and we found a dishwasher too. So far no luck sourcing a refrigerator. I’m guessing that the one we want is floating aimlessly in the Pacific Ocean.
This experience made me curious about supply chains and the myriad B2B sales that occur along it. What else is happening on that supply chain? What B2B sale is on hold because components are stuck on a freighter that cannot be unloaded because of sick dock workers or a shipping container shortage? Catherine and I were merely inconvenienced. But whose jobs were put at risk or lost? Yes, it’s good that poor Otto didn’t work on commission. But what about all the salespeople who do? Our renovation schedule was affected. But whose livelihoods were affected? Who couldn’t deliver what they had promised through no fault of their own— and what were the consequences? Who couldn’t afford what they had committed to buy — and what were the consequences of that?
COVID-19 has thrown the global economy a curveball. Supply and demand don’t seem to recognize each other anymore. Having money in your pocket gives you spending power, but that power is narrower today than at any time in my life that I can recall. In the early days of the pandemic, did anyone anticipate a supply chain fiasco like this one? How can we avoid a repeat in the future? What safeguards will the experts implement? Thomas Jefferson wrote, “An educated citizenry is a vital requisite for our survival as a free people.” If there is a silver lining to this story, maybe it’s that more people will be inspired to educate themselves on how the products they use every day get to their homes. It’s a rich and multi-layered story touching on geography, economics, transportation, logistics, and sociology. Look around you. Pick out an item that came from a store or a warehouse. I’m looking at a box of tissues. The story of how it got within my reach is a globe-spanning epic with a cast of thousands. In future posts, I’ll profile a few of the business-to-business sales that took place along the supply chain, all so that I can pluck a tissue from this box. I’ll try to form a big picture of how and where the materials, the packaging, and the printing come together—and more important, how people come together—to get stuff to our homes, businesses, and schools. And I’ll ask the experts about what today’s supply chain fiasco could mean for the future of sales. I’m pretty sure that Jefferson wasn’t thinking about a home-appliance shortage when he wrote about an informed citizenry, but this citizen wants to know more about the supply chains that affect all of our lives. So stay tuned.
In the meantime, buddy, can you spare a refrigerator?
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