By John F. Di Leo, Opinion Contributor
The Biden-Harris regime has announced a new “White House Council on Supply Chain Resilience.”
This new council is charged with preventing such problems as we experienced in the famous “supply chain crisis” of 2021 and early 2022 that preceded, and contributed to creating the current economic downturn.
Granted, the Biden-Harris regime had already created a “Supply Chain Disruptions Task Force” in the first months of 2021, virtually as soon as they changed the names and dress sizes on the White House letterhead, and that didn’t seem to help. Maybe they’re hoping we forgot about that one. But then again, maybe the task force just misunderstood the mandate? If they assumed their job in 2021 was to create supply chain disruptions, then they succeeded beyond their wildest dreams.
First, a refresher: The United States, and in fact the entire developed world, has allowed itself to become dependent on Asia, especially Red China, for an enormous range of manufactured products, from toys to clothing, from tools to decorations, from components to finished goods.
Before 2020, the global ocean transportation network, which moves primarily by intermodal container (mostly stackable 20’ and 40’ steel boxes that cranes transfer back and forth from ship to train to truck) moved like clockwork in a careful and difficult balance, with surprisingly dependable transcontinental and transoceanic transit times.
Since the dawn of containerization in the 1950s, the carriers learned to master the challenge of having empty containers ready to load wherever in the world they were needed, often subsidizing export cargo in order to ensure there would be containers available for import cargo. From the perspective of the United States, that essentially meant that transpacific westbound ships have generally carried a mix of full and empty containers, so that they could be full of full containers on the eastbound trip back from Asia.
And all this worked smoothly, with transit times generally around three to six weeks.
Until 2021.
All of a sudden, the ocean and rail transportation networks were overwhelmed with cargo in 2021. People with “stimulus checks” in their pockets and free time on their hands to peruse online shopping sites caused imports from Asia to skyrocket past the ability of our transportation network to handle them.
The world’s seaports could barely handle such volumes – and North American seaports in particular were utterly buried.
In 2021 and early 2022, it became common for ships to sit for weeks in port awaiting unlading, and then for the goods to sit for a week or two in port waiting for railcars to move the containers inland. To add insult to injury, America’s major rail hubs couldn’t handle the volume either, so cargo stacked up for weeks again, in such internal points as Chicago and Kansas City.
The former average transit times of three to six weeks for international surface travel were suddenly transformed to periods of three or four months per shipment, or even more.
With such suddenly low turnarounds on their equipment, the carriers had to increase prices. They still had the same yearly lease rates on their ships and container fleet; if that same fleet could only move three or four round trips a year instead of eight to ten, for example, then prices would have to reflect that change, in order for the carriers to pay their bills.
Combined with the Biden-Harris regime’s ongoing attack on the energy industry, this one-two punch caused an incredible increase in the cost of cargo transportation across the board, not only here in the U.S. but globally. This combined transportation disaster is, in fact, a large driver of the inflation that we have suffered since January 2021.
The supply chain crisis, which at its peak saw a tripling of transit times, a quadrupling of some freight rates, and a terrible shortage of transportation workers (especially truck drivers) has now subsided. The crash of the broad economic downturn that began in mid-2022 has continued. With inflation muddying the usual comparisons, and making actual losses look like anemic growth, it doesn’t technically count as a recession yet, but we all know that’s what it is.
So we don’t have a supply chain crisis right now at all. If you want something, you can get it. Whatever you need is probably sitting on a shelf, waiting and hoping some kind person will find it in his heart to buy it.
But if we want to forestall another supply chain crisis like that last one, what do we need to do?
Well, during the supply chain crisis of 2021-2022, the Biden-Harris regime spent most of their time yelling at the steamship lines, demanding that they move the cargo more quickly, and threatening to fine them if they didn’t.
The steamship lines basically responded, honestly, by saying that where they are in control, on the high seas, they’re moving the cargo along just fine; the problem is that America’s ports and rail network can’t handle this volume, and they’re just as frustrated as we are.
The regime was specifically blaming the party with the least control over the problem, because the challenge of quickly expanding seaports and rail hubs is indeed an overwhelming one.
Do we really need another federal commission at all, considering the fact that the Biden-Harris regime’s first one didn’t accomplish anything, and all it did was to try to blame the very party with the least responsibility for the problem?
Or should we perhaps look instead at the actual causes of that last one?
1. Our seaports and rail hubs are too small to handle a real economic boom. They process an enormous amount of cargo already, they really do, but to handle a spike, they need to be bigger. Already our ports and rail hubs regularly work near capacity. It takes years, money, and a lot of land to expand seaports and rail hubs. They take up a lot of room. This is more a local issue than a federal one, though. The sluggish expansion at present speaks to the incompetence and lack of vision of many of America’s big cities, as well as the outrageously slow governmental permitting procedures required for such expansions.
2. Our federal government, and to a lesser extent, some state governments too, contributed to a good deal of foolish impulse spending from 2020 through 2022, by issuing a variety of stimulus checks, both to individuals and to businesses, too much of which was quickly converted into imports from Asia. These programs didn’t really help Americans much, they largely helped Chinese manufacturers.
3. The ridiculous American lockdowns of 2020 caused a very sudden change in the way people shop, all over the world but especially in our blue states. This sudden transformation of our economy – for no public health benefit whatsoever, remember – caused widespread failures in the restaurant, retailer, hospitality and commercial real estate industries, while creating a boom in the far less lucrative arenas of ride-sharing and grocery and fast food shopping delivery. This transformation wreaked havoc with manufacturing, packaging, and inventory management across the country.
4. Even worse were the lockdowns imposed by China. Though Beijing stopped welding shut apartment buildings and other private residences after the first few months, they did continue to implement crippling month-long business lockdowns in province after province throughout 2021 and 2022. American factories dependent on China for even a small percentage of their Bills of Materials were often stuck with hundreds of thousands of half-finished assemblies collecting dust for months at a time, as they awaited vendors in a shuttered Shanghai, or a shuttered Ningbo, or a shuttered Wuhan, or a shuttered Xining, to reopen and finally ship the parts they so desperately needed.
We could go on. But the fundamental point should be clear.
The supply chain crisis was caused primarily by government policies – both directly and indirectly. Lockdowns imposed by federal and state governments, both here in the U.S. and abroad. Unresponsive bureaucracies standing in the way of needed expansion instead of encouraging it. Dollar-devaluing “stimulus checks” issued willy-nilly to curry political favor, encouraging irresponsible purchases and spurring inflation. And as always, making America a crummy place for manufacturing, so that we would buy ever more from China.
This last point cannot be stressed enough. Calling it a “supply chain crisis” is, frankly, just a politically-weighted euphemism. This term gives the impression that there are problems everywhere, from raw materials to finished goods, from vendors to consumers. But that’s not the way to look at it.
The right way is to recognize that this is all an error of government. We had trouble buying so much from China because, after all, we buy so much from China – not just China alone, of course, from lots of countries, but China is the biggest foreign problem source in this regard. If we bought everything from Mexico and Canada, in fact, we would have had no crisis, because that commerce is handled by truck. It’s the dependence on transoceanic vendors – primarily in China – that caused our problems.
And why are we so dependent on transoceanic vendors? Because of government.
Because our governments – state, local and federal – all continue to make the United States a difficult, expensive place for manufacturing. Just in these past three years – we have seen federal, state, and local bans, either directed by or implemented by the Biden-Harris regime – forbidding or rendering economically impossible the manufacture of our economy’s most popular ovens, water heaters, furnaces, light bulbs, and even automobiles.
What sane entrepreneur would start a new factory in a country with such madness running rampant in its capitols?
If we want to prevent another supply chain crisis, the method is simple.
No more commissions, no more edicts, no more executive orders. Just return to the Constitutional government our Framers intended for us, so that the invisible hand can naturally guide our way, and free us from the bureaucratic nightmares that can lead to nothing but bread lines, empty shelves, and transportation bottlenecks as far as the eye can see.
Copyright 2023 John F. Di Leo
John F. Di Leo is a Chicagoland-based trade compliance trainer and transportation manager, writer, and actor. County Chairman of the Milwaukee County Republican Party in the 1990s, after serving as president of the Ethnic American Council in the 1980s, he has been writing regularly for Illinois Review since 2009. Follow John F. Di Leo on Facebook, Twitter, Gettr or TruthSocial.
A collection of John’s Illinois Review articles about vote fraud, “The Tales of Little Pavel,” and his 2021 political satires about current events, “Evening Soup with Basement Joe,” Volumes One, Two, and Three, in either paperback or eBook, only on Amazon.
