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Discombobulated Global Trade

Discombobulated Global Trade

Sheesh!

Global trade has never been this messed up. We are having a hard time getting out-of-stock products back on the shelves. So is everyone else. Let me describe some of the reasons.

Number 1

Global trade used to be boring.

Each month, Country A shipped raw materials to Country B. Country B made some products and shipped them to Country C. Country C bought and used the products and ordered more. Global trade was smooth, steady, even, and predictable. Ships plied the oceans with schedules as routine as busses coming down main street. If we needed to send Calamityware, there was a ship from Europe to North America every two weeks. Then Covid-19 hit and factories closed, crews were put in quarantine, and ship owners used the lull to pull boats out of service for maintenance.

Asia got back to work before Europe and North America. The result was a big imbalance. Throughout most of 2020, shipping containers were leaving Asia far faster than empty containers returned. The world still has plenty of shipping containers, but almost all of them are in the wrong place.

Number 2
Fewer flights. 

The pandemic also eliminated thousands of airline flights that once routinely transported small, high-value items daily. Suddenly, during the crisis, those items had to try to find their way on to already over-crowded ships.

Number 3
Stumbling recovery.

As workers in Europe, Asia, and North America started to get back to work, everyone's productivity was down. Work required care, isolation, social distancing, sanitizing, testing, quarantines, and staying home to supervise kids that normally would have been in school. Entire production runs were held up because a skilled worker was stuck at home or some parts or raw materials didn’t arrive on time. Throughout 2020, deadlines slipped and then deadlines slipped again.

Number 4
Lean inventories.

Because global trade used to run so smoothly, big businesses got in the habit of keeping inventory levels low and relying on frequent shipments to meet demand...an approach called "just-in-time." At the start of the pandemic, no one knew what was going to happen so inventory levels were allowed to run down. Now big retailers (think Walmart, Amazon, and Ikea, etc.) are ordering extra quantities of everything to build their inventory levels back up. If their big orders once filled a boat, they now need two or three boats, and thousands of extra containers...which don't exist! Yikes!

Number 5
Ship building is pokey.

Adding more vessels isn't an option because it takes years to design, finance, and build a new ship. It also takes a lot of time to expand the ports where ships dock. So, global trade will have to find a solution with the tools that are already available. Returning to a balanced state is going to take a while.

Number 6
No place to dock. 

Unloading a container ship requires special port facilities with big, fancy cranes. The spaces where a ship can park for loading and unloading are limited. The number of ships waiting to dock at ports on the west coast of the U.S. are now at record levels. East coast ports are backed up too. It's getting so bad that ship owners are refusing to schedule trips from Europe to East Coast ports because the wait time to dock will be so long that the cost of waiting around may wipe out their profits. 

Number 7
Skedaddle. Your time is up.

Once a ship docks, the clock is running. If they can't unload and re-load within a specific time limit, penalties can be added. In some cases, this will mean leaving some containers behind to escape extra costs. Those containers will be picked up eventually, but it could easily be months later. Jeepers!

Number 8
I know I promised, but I changed my mind. 

One can have a ship scheduled for a specific date and discover the vessel has changed its plans. Your booking from Europe to North America has been cancelled. You must start over. One strong reason to cancel a planned trip from Europe to North America is cost. Ship owners are discovering that right now they can make more money with a run from Europe to Asia and back. Until a boat leaves with your cargo on board, you can't be 100 percent sure your stuff is really coming. Promises can evaporate.

Number 9
Discover a new path. 

Because of all these disruptions, it might make sense to use a more round-about route to get your product where you want it. For example, you could sail to a remote port that is not overcrowded and then use a train or trucks to shuttle the product to the final destination. Re-routing is brilliant, but it will probably take longer, and it is bound to cost more.

Number 10
Plain old calamities.

Don’t forget that in addition to all these problems there are still the conventional disasters—Suez Constipation, storms, icebergs, malfunctioning gear, incompetent captains, mutinies, pirates, giant crabs, and all the ordinary forms of bad luck. They never go away.

If we seem to be taking too long to get your favorite product in stock, now you know why. Remember, things could be much worse.

Don—Pittsburgh, April 15, 2021

Comments on this post (16)

  • Jul 26, 2021

    My son is Polish (adopted).
    I think these cups will make his day!

    — Marilu Wood

  • Jul 12, 2021

    Great post, Don. Very well written, succinct explanation of the global trade challenges and why it will take some time to restore balance and normalcy.

    — Kevin

  • May 14, 2021

    Hi, Don,

    You’re also quite the writer! I get it, all of it, from working in fresh produce in Boston & learning to watch the weather in California for pricing/inventory. (Mud slides? Lettuce is pricey!)

    Sadly the last 4 yrs taught a lot of people impatience and me-first, emphasizing xenophobia. I get it. Everyone involved is JUST PEOPLE. Like us.

    I too had a COVID year TIA. Scary as hell. Take care of yourself; your imagination is a treasure.

    Love

    Laurie

    — Laurie Metter

  • May 09, 2021

    Thank you for this great blog post – well done as always, and something I can point people toward instead of explaining this over and over!

    As for Judith’s comment above – does she really want to pay what it would cost to have these items produced here? I doubt it. Also, let’s suppose for a second a textile or ceramics factory DID exist in the U.S. that was capable of providing the quality of these goods – the raw materials would still be sourced overseas, so we would actually wait longer than we are now, for completed products. That’s not even considering how many workers have been lost to COVID, or the reduction of capacity necessary to manufacture with COVID safety measures…

    Furthermore, global trade exists because there are artisans all over the world that have a niche that they do best – as I’m sure is the case with the porcelain here – porcelain has been an art form in China for longer than some books would have you believe the Earth has existed – and in Europe well before Europeans “discovered” the U.S. – The answer is not to get something done well by a factory in another country done in the U.S. half as well at twice the cost.

    Textiles are likewise produced with better quality and less cost elsewhere, where the U.S. has turned once thriving textile mills into gentrified condos… While it is true some textiles are produced in the U.S., those are either for a specific manufacturing purpose, or are small looms that make very specialized items, usually at significantly higher costs. Again, generally, we do not produce the raw materials needed within the U.S. to sustain the rebirth of the industry – not would any banker find a textile startup to be a particularly attractive investment, especially given the margin issues where the real estate, machines and support systems would be exorbitantly costly – not to mention the environmental reasons many such factories can’t operate on U.S. soil – since to operate in a sustainable manner without the toxic byproducts is very expensive and therefore, again, increases the cost per unit so greatly that it doesn’t make sense. And no, the answer isn’t “let’s deregulate so it’s cheaper” – the regulations came about because factories were killing people with their waste… LITERALLY. It’s simply unfeasible.

    Further, the U.S. as a whole decided decades ago to invest in tech and services – this was necessarily at the expense of manufacturing, including mass production capabilities for things like fine china and textiles. Thus, no jobs are being “lost” to overseas sales – they buy our tech and services, and we buy their goods, as they still have a high percentage of manufacturing facilities that were paid for decades ago, and this can still produce good cheaper. (Notwithstanding the obvious issues of foreign work conditions some such factories have – but I have no reason to suspect this company of utilizing a sweatshop, given their product quality and price points.)

    As far as the U.S. “needs the jobs” – that is untrue, and a naive statement given the realities of our workforce and basic economics. What you suggest requires factories that no longer exist, with no reason to build new factories for these items, as there are not the workers to operate one, financing to make it a going concern, or raw materials to source locally and/or economically. No banker would see a new bulk product textile factory as a good investment, knowing what they do about the realities of the global textile landscape, and the regulatory hurdles needed to operate in any U.S. state. No banker likewise would have great interest in a new manufacturing plant for fine China, since that too would have enormous start up costs (including having the machines likely manufactured in Europe…) and require skilled artisans to work there… Those skilled artisans don’t grow on trees, and are likely not available in any number – nor willing to do so on a factory floor, for minimum wage.

    The people who are jobless are not jobless because merchandisers are purchasing goods globally. They are in trouble because of how our U.S. government has a warped devotion to the 1%, while leaving workers with less than nothing – and simultaneously how completely unhinged half our population has become – believing conspiracy over facts, and propaganda over science. The people trying to fix these gaps are called “socialists,” “communists” – or worse… If the corporations that benefit from historic tax breaks and governmental incentives paid even a fraction of what everyday people pay in taxes, we could pay for job training, higher education, public works projects and health care – all leading to not only fuller employment, but better jobs for people, at higher wages, health care, child care, and a healthier happier population… If corporations actually “trickled down” profits made via government benefits, programs and tax loopholes, workers might also be in a better position – but as data shows – trickle down economics simply doesn’t happen, much less work.

    The U.S. low minimum wage, extreme cost of higher education, lack of guaranteed health/leave benefits for workers, lack of universal healthcare overall (which would lead to people feeling more comfortable starting new businesses…), lack of meaningful paid maternity leave, lack of child care resources, barriers to entry of professions that lead to even greater disparities between groups – all that is what affects workers. There are plenty of open jobs – but they are jobs few can afford to take, since a minimum wage won’t pay rent, much less the bills that are common for daily living – like water, electric, and food… And if we are considering a female who is a single mom and unemployed, unless you guarantee childcare, after-school care, health care, etc., how exactly can she go to work? If she is unemployed, she can watch her children when they are not in school, and have Medicaid for her children. If she is employed at a minimum wage job, she loses her children’s health care, and the cost of childcare is more than her take home pay… So, she is working, but homeless? Her children have a mom who works but no health care? It’s a systemic issue – that isn’t about “we need more jobs” – it’s about “we need a better system.”

    So, the issue isn’t that CalamityWare is purchasing items abroad – and any basic economics class would teach the same. The answer isn’t “bring more jobs back to the U.S.” – the answer is “make the U.S. a place that cares about its citizens and supports them to live a full life…” – and last I checked, CalamityWare wasn’t the issue on that score…

    — Maggie W.

  • Apr 19, 2021

    I like Ruan’s April 16th idea of throw pillows. Imagine a calamitous pillow fight!

    — Mary Stark

  • Apr 19, 2021

    Hi,
    I love your bat t-shirts, bought a bunch for family and friends, but spent a fortune on customs duties (I live in Sweden). If your items are manufactured in Europe, can’t they be shipped from there to other places in Europe, thus saving us from customs duties?

    — Jenny

  • Apr 17, 2021

    “Suez Constipation”! I was dyin’, it’s such a funny description. I’m glad it wasn’t worse.

    — Manuel Hernandez

  • Apr 17, 2021

    I just want my Kickstarter bowls. Don’t mind waiting a🎁bit longer. That’s what this year is all about anyway.

    — Sharon Phares

  • Apr 16, 2021

    With my first chance ever to acquire some Calamity Ware, I was super excited to shovel some pandemic stimulus money to a valued artist retailer, only to be dashed by exactly what you so expertly outlined. I am convinced it’s all the Evergreen’s fault. Hopefully none of your manufacturing workers have fallen to covid. That was my other fear.

    I remain vigilant awaiting an in stock email so I can hit GO on my birthday order. I was diagnosed with cancer just after suffering a fractured ankle joint last year. But – NO chemo!

    It’s true it could be a lot worse.
    Best to you and yours,
    Catherine

    — Catherine

  • Apr 16, 2021

    Your excellent blog should be required reading for all consumers! There will be a test later

    — Carol Smith-Barnes

  • Apr 16, 2021

    That was so helpful — I keep refreshing the page for your 12-oz 4-pack of mugs, in the hopes that they’ve arrived and I can purchase them along with the small plates that were sold out and have now come in, but I see that perhaps I shouldn’t wait ;-)

    — Marlene Merritt

  • Apr 16, 2021

    This has nothing to do with shipping (except in a roundabout way) but I was wondering if you might ever offer throw pillows. I’d love some calamitous pillows to throw around. Cheers in all circumstances.

    — Ruan D Wright

  • Apr 16, 2021

    Why not cut all the problems and shipping mishaps and have Calamityware produced in this country ?

    It can’t be that more expensive and the USA needs the jobs.

    — Judith

  • Apr 16, 2021

    Thank for the A-plus description of how this stuff works. I like the short paragraphs, numbered paragraphs, clear writing and coherent explanations . Many things can be worse, but Calamityware and its denizens are the best , as are the items you sell.

    — Marilyn Brown

  • Apr 16, 2021

    I enjoyed this peek into global movement of goods. Thanks very much!

    — Val

  • Apr 16, 2021

    Fantastic explanation of shipping delays. I totally love everything you design and make and the “Things could be worse” tag line is wonderful ! especially so with your design that illustrates it. Ordering your mugs during the pandemic made me smile and gave good humor feelings to the people I gave them to. So far your company is my favorite in years ! In all categories !! Thank you for making me laugh in a very tough time !

    — Kristen Accola

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