The extreme unpredictability of global supply is reaching levels not seen since the pandemic. But this time, it’s not safety restrictions and quarantines affecting our networks; it’s erratic and ever-vacillating tariffs. Still, the effects are unnervingly similar.
This week, the ports of Long Beach and Los Angeles — two of the busiest in the United States — took a big hit after the most recent tariff announcement. Both are reporting huge drops in traffic, with 34 and 36 canceled sailings respectively, per NBC Los Angeles. In total, there was a 44% drop in cargo this week.
The CEO at Long Beach told the news station that fewer products arriving from China unfortunately also means fewer employment opportunities and on-the-job hours for dockworkers. The article goes on to say that nearby businesses, such as lunch spots and gas stations, are also facing significant losses. As for the average consumer, they can expect to find emptier store shelves and feel the pinch at the cash register.
I spoke with KNX on Wednesday about the decreased inventory, noting that the first items people will miss will be electronics, fast fashion, home goods and toys. Although some organizations moved inventory forward in anticipation of the tariffs, once those supplies are depleted, we’re going to have stockout situations and much higher prices.
“I think back to the days of product scarcity that we experienced during the pandemic,” I explained in the interview. “I'm not saying it's going to be that dire; but consumers may see fewer sizes, colors and options. And more than likely, small and medium-sized companies will get hit hard because they don't have the flexibility or the resources to withstand these kinds of shocks to the system.”
Chart your course
Even if a new trade deal with China is reached, our global networks can't just flip a switch and get stocks back on shelves — it could take months. As supply chain professionals, we have a key opportunity to help ensure our networks are prepared. And as always, ASCM is here to support you in these critical efforts.
The webinar Navigating Supply Chain Challenges: Agility, Resilience and Strategic Flexibility will take place May 15. Supply chain experts Nikolaos Delioglou and Rene Farcher will provide valuable perspectives and methodologies derived from highly successful consulting projects. They will help your team and organization adapt swiftly, optimize decision-making and drive sustainable cost efficiencies. Register today
To keep learning, be sure to register for CHAINge Europe in Brussels, June 17-18, and CHAINge North America in Columbus, September 9-10. Both events feature expert talks by supply chain thought leaders, strategists and policymakers; hands-on workshops; and valuable networking with your colleagues from around the world. Join us for CHAINge and gain the critical insights, innovative strategies and global connections necessary to build resilient supply chains and expertly navigate the turbulent waters of international trade.
