Supply chains are like a row of dominos. Once one step fails, the rest follow. Since March of 2019, this has been happening to the global shipping industry on a massive scale. Spanning every continent and affecting all consumers, these are the reasons bikes have been delayed.
90 percent of the world’s trade moves on water. What’s not a surprise is that three Chinese manufacturers control 80 percent of the world’s shipping containers: CIMC, DFIC, and CXIC. This in itself, is an unbalanced system. With Covid-19 cases rising and the spending habits of Americans following, a bottleneck was inevitable. Making the news of a massive cargo ship blocking the Suez Canal for six days, where 12% of global trade passes through, an even bigger obstacle. Concentrated areas such as factories and ports were not only plagued by frequent outbreaks, but also subsequent new safety measures that slowed down each phase. The cherry on top? Shipping companies have recognized that in destruction lies a profit opportunity. In fact, the Wall Street Journal recently covered that Maersk, a shipping company based in Denmark, “reported a record net profit of $2.7 billion in the first quarter, up from $197 million in the first quarter of last year."
United Legwear, a company that produces apparel for brands such as Puma, Champion and Skechers, notes that they are, “now paying $24,000 to ship containers from Asia that cost roughly $2,000 before the pandemic.” This spike in costs is happening across the board, pushing a variety of small businesses into delay while those on Wall Street are lining their pockets. There is always profit to be made in destruction, and sadly many are jumping at this opportunity rather than forming a solution. Look at Amazon for example, a company that has profited heavily from this pandemic. As one of the top U.S. importers of containerized goods, the company, “gets priority access to containers and space on cargo ships.” This results in smaller companies like Blix, fighting for snippets of space only to be left unloaded, sitting idle off the coast of California.
Change is both necessary and constant. The cracks we see today can be skyscrapers tomorrow, it’s only a matter of will and grit. Already, President Biden has created a task force meant to address the near-term bottlenecks and issued an executive order that requires a review of critical supply chains. Now that the kinks have been exposed, we can start rebuilding a stronger, self-sufficient system. In the interim, persistence will prevail. As a company and a country, we will rise above the wake of 2020 into a brighter tomorrow. It’s only a matter of time and patience.