The world is suffering an “everything shortage”, says Derek Thompson in The Atlantic. Car manufacturers are stopping assembly lines because they don’t have enough semiconductors. Shipping containers are in short supply where they’re needed – sending a parcel from Shanghai to Los Angeles currently costs six times more than the return journey. Dozens of cargo ships are bobbing off America’s West Coast because there are too few port workers, lorries and lorry drivers on shore to unload them.
There’s no single cause for this unprecedented disruption to global trade – it’s a “veritable hydra of bottlenecks”. But the main driver is an imbalance between supply and demand. “Cabin-fevered Americans” and other westerners are going on post-pandemic spending sprees – just as the Delta variant has shut down factories in Asia.
This “shortage economy” is down to deeper forces than just Covid, says The Economist. Decarbonisation is one: “Swathes of China have faced power cuts as some of its provinces scramble to meet strict environmental targets.” Protectionism is another. Nations now use trade to punish geopolitical opponents rather than to maximise economic efficiency. The danger is that these supply-chain problems make us spurn environmentalism and globalisation – that really would have “devastating long-term consequences”.
But the shortages should alert us to the fragility of our just-in-time logistics, says Kim Moody in The Guardian. The just-in-time model is all about minimising stockpiles of goods and unused minutes of labour – great for profit margins when all goes smoothly. “But speed, as any Formula 1 driver will tell you, brings its own risks.” If gas prices rocket or a container ship gets stuck in the Suez Canal, the shocks reverberate around the world. The just-in-time model also demands precarious low-paid jobs to service it, which come with their own societal problems.
Cue the British government deciding to sail boldly into these “howling economic winds”, says Tim Harford in the Financial Times. Boris Johnson sees Brexit-related shortages as “tough love for the British economy” – he wants to wean it off cheap labour and create a more resilient “just in case” setup. But businesses might not innovate to his liking. Faced with a shortage of waiters and cooks, some restaurants will use more frozen food. The challenge of recruiting abattoir workers and fruit-pickers may be met by importing food instead. “If we can no longer bring the Latvians to Norfolk turkey farms, Norfolk turkey farms may have to go to Latvia.” I, for one, “am suffering from an acute shortage of optimism”.