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Time of total shortages: will American children wait for gifts for Christmas?

Written by The Frontier Post

SHITOV Andrey

If Americans want their children and grandchildren to receive gifts from Santa Claus, orders must be placed today. There would be nothing unusual in such a reminder from retail chains if it were not for the timing: after all, Halloween has not yet come, and before Thanksgiving, from which the season of Christmas sales traditionally starts across the ocean, in general, almost a month and a half. Meanwhile, experts warn that it may be too late to reserve gifts even now, especially if the beloved child dreams of some newfangled gadget. In the country, which is considered to be the main showcase of the mass consumption society, the season of total deficits burst out of the blue.

“The Great Supply Disruption “

And this is, of course, not only about children’s fun. The New York Times calls for “getting used” to the fact that “the world lacks everything”, and sees the key source of the problem in “The Great Supply Chain Disruption” around the world. The publication, by the way, warns that “if the interruptions drag on for a long time next year, it may further spur the rise in prices for a number of raw materials.”

The problem, which the newspaper calls “a painful lesson in the interconnectedness of economies,” is by definition systemic. “The same shipping container, which at first cannot be unloaded in Los Angeles due to too many quarantined dock workers, then cannot be loaded with soybeans in Iowa, making buyers wait in Indonesia and potentially fraught with a shortage of feed for livestock in the South “East Asia,” explains the New York Times. “And an unexpected surge in TV demand in Canada or Japan is exacerbating the shortage of computer chips, forcing the auto industry to slow down production lines from South Korea to Germany and Brazil.”

Having dealt with the examples, the newspaper cites the chronology of events. It looks like this in its description: with the arrival of the pandemic, people locked in their homes decided to buy, say, a fitness machine or a new food processor. The demand for the equipment increased, while shipping containers were scattered around the world, as they were used for the emergency delivery of medical supplies, including protective masks. The shortage of forms for transportation was further aggravated by their slow unloading in ports, since in conditions of social isolation the workers were locked up.

At the end of March, there was a “fiasco in the Suez Canal, through which about 12% of world trade passes,” reminds the New York Times. The canal was blocked by a ship stuck in it for almost a week, despite the fact that, according to insurers from Lloyd’s List, the blockade cost world trade about $ 400 million an hour. And later, according to the publication, “the consequences were felt for months.”

In May, due to a small outbreak of a new strain of coronavirus, China closed for several weeks a huge container port near Shenzhen, then in mid-August it stopped work and an even larger terminal in Ningbo, and in the latter case, the reason was the detection of infection in only one person. The move “jeopardized the supply of goods to US stores for [trade] Black Friday after Thanksgiving this year, November 25, and served as a” warning that other ports may be closed by the authorities, “the newspaper said.

The attempts of the publication to gradually shift the arrows to China, of course, are understandable without explanation. For the sake of fairness, it can be said that after that it published a long article about the “port crisis” in the United States itself – on the example of Savannah (Georgia). There, according to the newspaper, dozens of ships are waiting in line for unloading and the port “runs out of space” to accommodate containers, which have accumulated one and a half times more than usual – in particular, due to the lack of truck drivers who must deliver the delivered goods on their own. wagons.

At the same time, it is reported that, according to the Institute of Supply Management, American industrialists now have to wait an average of 92 days “to collect all the parts and raw materials needed to manufacture products.” This is a record and, of course, a very unpleasant one, since before, Americans have always been proud of the ability to work literally from wheels, with a minimum inventory. I remember, back in Soviet times, I wrote about how they imposed this and other similar methods in post-war Japan through the efforts of their business guru Edward Deming.

True, against the background of the pandemic with all its echoes, the question involuntarily arises: where are all their vaunted effectiveness now? And at the same time one more: where is the willingness to really interact with other countries, including Russia and China, at least in the production and distribution of vaccines, not to mention other common challenges? On this score, publications overseas are not visible.

” Silent Panic “

Everyone understands that the current supply problems in global trade have evolved amid the COVID-19 pandemic. But it is also clear to specialists that it is not only about covid. This was recalled the other day on the pages of the British Guardian by an American expert on trade competition and antitrust regulation Matt Stoller, who recently worked in the staff of the US Congress.

 “A quiet panic is reigning in the American economy,” he writes. “Medical laboratories are running out of pipettes and test tubes <…> restaurants are experiencing interruptions in the delivery of food, in the auto, paint and varnish industry and electronics, firms are curtailing production due to a shortage of semiconductors. diner] Burger King in Florida, a person could not eat properly because there was a sign there: “Sorry, we are not serving fries with any orders.” We’re out of potatoes. “Imagine America without French fries!”

In addition to covid and the debate over whether it is useful or harmful to overclock the printing press of the Federal Reserve Service (US Central Bank), Stoller said, the current crisis “is also the net result of the political decisions that have been made over the decades since 1970. -s, and put consumer sovereignty over citizenship. ” “The concentration of power over four decades in the hands of private finance capital and monopolists has made us uniquely unprepared for a supply shock,” the specialist resented. New York Times – note TASS) with his book “The World is Flat” – this is exactly the problem. Like the financial system before the collapse of 2008, such an economic order hides its real fragility. It seems like it works great, but only until it stops. “

The author lists a number of specific political mistakes and misconceptions that have led, in his opinion, to the current situation. Among them – “weak antitrust legislation; deregulation of such basic infrastructure sectors as maritime, rail and road transport; refusal to invest in the development of domestic production; emphasis on finance, not industry, in trade policy.” An instructive list, I must say.

Political self-harm

For clarity, Stoller illustrates his theses with a number of specific examples. So, according to him, “over the past 15 years, four firms have bought up the production of equipment and equipment for biopharmaceuticals – without any meaningful reaction from the antitrust authorities.” Now each of them is promoting its own standards that are incompatible with the products of competitors in order to “secure customers”, and this creates “artificial bottlenecks”. Of course, they are especially painful now against the backdrop of the pandemic, but they are still not generated by it.

On US railroads, “Wall Street has consolidated 33 firms since deregulation in 1980, leaving just seven,” the expert continues. years have cut their workforce by 33%, crippling public transport options. Union Pacific closed a huge sorting in Chicago in 2019 and is now so congested that it has suspended shipping from the country’s West Coast ports.

Regarding maritime transport, Stoller writes that after the 1997 reforms in the United States, “it is globally consolidated into three giant alliances, whose ships, which are too large to navigate, occasionally crash into the shores of the Suez Canal.” And the shortage of long-distance truck drivers on the roads, he said, is also “a story about deregulation.”

Finally, the author explains the move to East Asia, primarily to Taiwan, of the production of the most advanced electronic microcircuits-chips by “a purposeful policy to curtail investments in labor-intensive processes of making things” in the United States. I am familiar with this approach. In a couple of decades of coverage of the work of the IMF and the World Bank in Washington in the recent past, I have heard enough talk from American financiers about the “knowledge economy” and how money can be made almost out of thin air.

Now, according to Stoller, both the authorities “and even business leaders” in the United States are starting to wake up. In official documents, references to the “shortage” of certain goods and services appear more and more often, words about the inevitability of state regulation are heard at industry conferences. The expert himself calls for a “reorganization of the hierarchies of power and influence” in the United States in order to give priority not to financial consultants and others like them, but to production workers. According to him, “Congress should strengthen antitrust laws, ban all major mergers [of companies], take tight control of finances and re-regulate transport industries.”

Well, as I like to repeat after my American friends, “I will believe it when I see it.” In the meantime, long-standing doubts are only growing in me that the “invisible hand of the market” is capable of managing everything and arranging everything in the best possible way.

You don’t have to go far for confirmation. Over the past few days, everyone seems to have figured out how the European Union punished itself by insisting at one time that natural gas prices be determined on the spot market. A publication in the Guardian clearly shows that political self-harm – ostensibly in the name of the triumph of the principles of a free market economy – is just as confidently practiced overseas. According to the definition given at the forum “Russian Energy Week” by Russian President Vladimir Putin, there is “a man-made result of a short-sighted policy.”

” I want something better “

If even large industrial enterprises suffer from interruptions in supplies, then small businesses are even more difficult. The press is now replete with stories on this topic. My eye caught, for example, the story of the New York-based company Halloween Adventure, waiting for the upcoming traditional night festivities to collect “candy tribute” on the occasion of All Saints’ Day (October 31 to November 1) with mixed feelings.

According to the description of the British Financial Times (by the way, it seems to me that the British are especially eager to write about American problems, and the Americans – about the British), the company, on the one hand, expects that this year Halloween will be more profitable than ever since people are going to self-isolate, as they say, to have a complete break. On the other hand, the celebration may be the last for her, since last year the company lost about $ 2 million due to COVID-19, now, having resumed trade only in September, it is struggling to lure buyers, in particular, begging them to purchase gift cards.

She still hopes to stay afloat, since, according to the publication, commercial purchases for Halloween were made even before the new wave of covid caused by the Delta strain. The range, however, is still getting poorer, but the manager of the flagship store of Stich Azintime expects that he will be rescued by the abundant costumes of Batman, Spiderman and other superheroes. In his opinion, this year it is these images that will be in the greatest demand, because “people want something better than what they have lived with all the past year.”

In fact, however, no improvement has yet been seen, rather the opposite. Web tech publication Recode, owned by publishing house Vox Media, warns that “supply chain chaos is escalating in time for holiday shopping” and that “the most popular holiday gifts may not arrive on time, even if ordered now.”

As an interesting confirmation that US retail does not expect an improvement in the supply situation in the foreseeable future, Recode considers an unusual marketing ploy, invented by the large retailer Best Buy. This company, which specializes in the sale of home appliances and electronics, has begun offering its customers a subscription for $ 200 a year. The service package includes free shipping, round-the-clock technical support, price discounts, and most importantly – “exclusive” access to the most popular devices. “The idea of ​​guaranteed availability of goods can be especially attractive to buyers who fear that their pre-holiday orders may not be completed on time,” the publication states.  

Like other commentators, Recode emphasizes that the business is not limited to gadgets and gifts. “Here is a partial list of consumer goods that may be missing, delayed, or short when ordering,” the newspaper writes. “New clothes, school supplies, bicycles, pet food, paint, furniture, cars, gadgets, children’s toys , household appliances, building materials, anything that uses semiconductor chips, and even such popular fast food as chicken wings, ketchup bags, Taco Bell products, cakes at Starbucks and even milkshakes at McDonald’s (so far only in the UK). “

“Worse than we have at Perekrestok

I myself have lived in the United States for more than a quarter of a century, and this list amazes me. And he is not the only one: for example, the reputable Atlantic magazine recently published an article that “America Is Running Out of Everything” and even proposed a new term – “The Everything Shortage”.

“This is our economy now,” says the author. “Shopping trips that used to take an hour now turn into hours-long odyssey [because stores and pharmacies are missing one or the other]. Orders for tomorrow become orders. the day after tomorrow. Need a spare part for your car? Sorry, it will take an extra week. Are you asking for a book? Check in in November. Newborn cradle? This is in December. A team of workers for an extension to the house? Haha: pray to manage in 2022. “

I sent the article to my American acquaintances and asked if they had ever encountered a deficit personally. A friend from Washington replied that, in his opinion, the goods were in stock, but that they had only increased in price. For example, a bike bought for $ 700 before the pandemic now costs $ 1600. A lady from Seattle assured that “there are no problems with covid tests and paper towels,” and left the rest outside the brackets.

© AP Photo / Jeff Amy

Another friend, a Russian American in New York, sent in last year’s photos of empty store shelves; on one of them there was even an advertisement for a vacation of no more than two packs of oil per person. He added that there is no such thing now, but, for example, in ShopRite supermarkets, “the assortment is not as wide as we have in Perekrestok. I think that only people of our generation who still remember how the Soviet business travelers scattered their eyes in overseas supermarkets.

No end in sight

In the foreseeable future, as already mentioned, American observers do not expect to overcome total deficits. Moreover, Recode, for example, believes that trade flows from China may be further shallowed due to the fact that the authorities of this country are now trying to reduce energy consumption as much as possible. They are prompted to do this by various reasons: from the rise in world energy prices to a dispute with such a large coal supplier as Australia, and the desire to reduce harmful emissions into the atmosphere on the eve of the 2022 Winter Olympics in Beijing.

Atlantic cites an interesting detail about the shortage of containers: according to him, they were once deliberately driven empty to China, since the transportation of goods from Shanghai to Los Angeles cost six times more than in the opposite direction (by the way, you again have the “invisible hand of the market” ). I advise you not to rely too much on the US Postal Service, which has its own problems. And to his own question, how to put an end to the “lack of everything”, he answers in the spirit of Stoller: they say, it is necessary to “produce as much as possible” at home. Along the way, the author mockingly notes that if it seems to someone that Americans are able to moderate consumer appetites and switch to an “ascetic lifestyle”, then he “envies such a violent fantasy.”

ON THIS TOPIC

Vucic linked the energy crisis to the untimely conclusion of gas contracts with the Russian Federation

Vucic linked the energy crisis to the untimely conclusion of gas contracts with the Russian Federation

The New York Times also gives a bleak forecast, albeit in other words. He writes that Tony Haig, owner of the English firm PP Control & Automation, which creates and builds control systems for industrial enterprises in various industries, “is tired of trying to predict when all this madness will end,” and so far states: “The situation is definitely getting worse. Bottom not yet achieved. “

“There is no end in sight,” says Alan Holland, CEO of Keelvar, an Irish supply chain software company.

Recode does not hide behind other people’s assessments, but writes directly from itself: “Considering how easily the lack of one is aggravated by the lack of another, as far as one can judge, the end date is not visible.” The publication advises buyers not to order goods online before the holidays, but to “go shopping the old fashioned way.”

In your opinion, is it appropriate for them to wish them a Merry Christmas and a Happy New Year?

Courtesy: (TASS)

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